Employment Temination And Severance Negotiations

128 Innovation Capital Group / Blitztime,  September 24, 2009

By Robert A. Adelson, Esq.

At Will Employment and Exceptions

1. Massachusetts is at will employment jurisdiction

  • Employee may resign or Employer may                                  terminate employment at any time
  • With or without notice
  • For cause or reason or without cause or reason
  • With obligation to pay wages or accrued vacation pay and expenses through date of termination
  • No right to continued employment
  • No right to severance pay after termination
  • 2. Presumption employment is At Will

  • If nothing said or written and if no exception applies                      employment is at will
  • 3. Exceptions to At Will doctrine – Contract

  • Written Employment Agreement can supercede at will employment
  • Terms of agreement on term, severance will control

4. Exceptions to At Will doctrine – Implied contract

  • Offer letters
  • Employee handbooks
  • Policies
  • Practices
  • Oral promises
  • Promissory Estoppel – detrimental reliance

5. Vigilence of employers to avoid Implied contract

6.  Vigilence of employers to avoid claims for unemployment compensation for extended periods

  • Specific termination provisions in Offer letters
  • Specific termination provisions in employment contracts and Employee handbooks


Wrongful Termination by Statute

1. Termination for the wrong reason

  • At Will employee can be terminated for no reason or any reason
  • But cannot be terminated for an unlawful reason
  • 2. Discrimination

  • Age
  • Race
  • Gender
  • National Origin
  • Religion
  • Disability
  • Sexual Orientation
  • Military status
  • 3. Violation of Other Statutory Laws

  • Civil Rights
  • Equal Pay
  • Family and Medical Leave Act
  • Invasion of Privacy
  • Plant Closings/ Takeovers
  • Sexual Harassment
  • State and Federal Tort Claims
  • Wages and Hours
  • Whistleblower Protections
  • Worker’s Compensation


Tort, Equitable and Common law Claims

1. Implied Covenant of Good Faith and Fair Dealing

2. Violation of Public Policy

3. Negligent Hiring and Supervision

4. Interference with Contractual or Advantageous Business relations

5. Assault and Battery, False Inprisonment

6. Misrepresentation, Deceit and Fraud

7. Infliction of Emotional Distress

8. Fiduciary Rights of Minority Shareholders in closely held Corporation

Damages in Employment Termination

1. Contract Damages

2. Tort Damages

3. Statutory Damages


Demand Letter

1. Factual Background

2. Legal Claims

  • Implied Contract
  • Discrimination
  • Other Statutory violations
  • Good Faith and Fair Dealing
  • Tort Claims

3. Demands

  • Additional Consideration
  • Changes from separation Agreement
  • Attorney’s fees

4. Litigation

  • Deadline or recourse to litigation
  • Notice to preserve electronic records


Employment Litigation

1. MCAD filing requirements for discrimination claims

2. Complaint – Claims made and their survival

3. Discovery – plan to gain information to enhance case

4. Motions and briefs

5. Trying the case


Negotiating Severance and

The Separation Agreement

1. Severance Pay and Benefits

  • Amounts and timing
  • Allocations to Emotional Distress, Attorneys fees and medical expenses to save taxes
  • Payments for attorneys fees, outplacement and other specific costs to enhance severance
  • Medical coverage
  • Other Employee Benefits
  • Duration of severance

2. Job Search and reputation

  • Outplacement
  • Office Space
  • Inquiries from contacts and potential employers
  • References
  • Confidentiality
  • Mutual non-disparagement

3. Releases

  • Mutual release
  • Legal rights
  • Rights to enforce settlement
  • 4. Enforcement
  • 5. Cooperation

These materials were prepared by Robert A. Adelson, Esq., Partner at Engel & Schultz, LLP, 265 Franklin Street, Suite 1801, Boston, MA 02110, (617) 951-9980.        Fax (617) 951-0048. E-mail:radelson@engelschultz.com Website:  www.engelshultz.com Mr. Adelson is a graduate of Boston University, Phi Beta Kappa and Northwestern University Law School in Chicago where he was a member of  Law Review.  He also has an LL.M. degree in Taxation from New York University and is a member of the Massachusetts, New York and US Tax Court Bars.

Robert Adelson began his legal career in 1977 as an associate at major New York City law firms, first Dewey Ballantine and later Weil Gotshal & Manges, before returning home to Massachusetts in 1985, where he has been a partner at several Boston firms before joining his present firm as senior business law partner in 2004.  Mr. Adelson is specialized in corporate, taxation, contracts and intellectual property law. His clients are (1) startup and early stage companies; (2) officers, employees and executives; (3) consultants and service providers; and (4) family businesses.  Working with employees and executives, in addition to issues of employment termination, wrongful termination and severance negotiations, Mr. Adelson drafts, negotiates and advises clients on Offer letters and employment agreements; Noncompete, confidentiality, restrictive covenants; Stock, options, SARs and phantom stock; Issues under IRC §409A; Relocation, tax gross-ups, recruitment issues; Change of control issues; Severance, retention, termination agreements; Consultant, director, service agreements.

Mr. Adelson’s law firm, Engel & Schultz, LLP, is a small but broad service law firm of 6 attorneys in Boston.  The firm complements Mr. Adelson’s work in business and tax law with seasoned attorneys in litigation, real estate, family and probate matters.

Mr. Adelson is a frequent speaker at business forums and author of numerous published articles including articles on employment termination and employment negotiations. For articles, see http://www.engelschultz.com/index.php/category/publications/ For further information on Mr. Adelson’s background, see http://www.engelschultz.com/index.php/attorneys/partners/robert-adelson/

The speaker thanks Annette Reynolds, for the opportunity to speak and present to this meeting of 128 Innovation Capital Group / Blitztime on the subject of “Employment Termination and Severance Negotiations” from Boston, Massachusetts, on September 24, 2009.

The purpose of these materials is to to offer an outlines on the subject matter of the presentation to officers, executives and employees and ssome business owners on the issues of employment termination, wrongful termination and severance negotiations. Thus, it is hoped these materials will be informative to those in attendance.  These materials are not legal advice and not intended as any substitute for professional advice or counsel in a particular case.

(c) 2009 Robert A. Adelson


Author: radelson

Robert Adelson has been a corporate and tax attorney since 1977. He began as an associate at nationally prominent New York City “mega” law firms, first at the Wall Street firm Dewey Ballantine Bushby Palmer & Wood and later at the Park Avenue firm Weil Gotshal & Manges. In 1985, Adelson returned home, where he has since established himself as a respected Boston business attorney. He has attained partner at several small and midsize Boston law firms, most recently at Lawson & Weitzen LLP and then Zimble Brettler LLP, where he was a partner from 1994 to 2004 before becoming a partner at Engel & Schultz LLP.

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