Employee Incentives 2025

Trends and Developments

US Employment Agreements – the Duel Between Good Reason and Cause

Like any contract, an employment agreement should grant specific rights to both parties – the employer and the employee. The primary goal for the employee is to secure protection against the employer breaching its obligations or promises. Conversely, the employer aims to obtain commitments from the employee, such as restrictive covenants, that may not be enforceable without a formal contract.

An employee secures protection through an agreement that provides severance benefits if the employer fails to meet its obligations. Ideally, if an employee's employment is terminated involuntarily, the employee would be entitled to severance benefits that align with the amounts the employee would receive under the agreement for the remainder of its term. This presumes that the agreement includes a specified term. However, most employers will ensure that agreements either do not set a