TRACEY’S PRACTICAL EMPLOYMENT TIP
OF THE MONTH*

JUNE 2007: RESIGNATION AND COUNTER-OFFERS

Most people are surprised to find that resigning is not as simple as handing in a note to your boss and giving two (2) weeks notice.  In fact a resignation may be quite complicated depending on how long you have been at your job and the seniority or importance of your position.  This Monthly Tip explores several concepts to consider before resigning. 

First, you should not resign until you have confirmed your offer of employment.  If you are entering into an agreement that means you should wait until it has been signed by your new employer.  If the new employer requires a drug test and criminal background check it would be prudent to get the results back before resigning even if you have nothing to worry about.

Second, you should conduct a review of what you may be leaving behind or losing as a result of your resignation.  The longer your tenure the more likely your voluntary departure will have consequences on any welfare and benefit plans such as stock options, deferred compensation and pension that you participate in.  Make sure you understand the effects of a resignation on your rights to monies or benefits due you under these plans.

Third, make sure that by taking the new job you are not violating any non-competition, non-solicitation or confidentiality restrictions you may have agreed to.  If you work on Wall Street you should check to see if you are subject to what is known as “Garden Leave.”  Garden Leave is the period of notice you must give your former employer before you can start a new job, particularly if it is at a competitor.  You will remain on the company payroll during this leave period with benefits but it can delay your start date as much as 90 days if you cannot negotiate for a shorter leave.  If you violate your Garden Leave you may forfeit continued vesting in stock options or deferred compensation.

Fourth, while giving two or three weeks notice is prudent do not be surprised if your employer asks you to leave the premises immediately.  They do not have to accept your offer of notice and may have business reasons for not wanting you to remain in the office with continuing access to confidential information.  Pack your personal items and organize your desk and files before you resign so that you are ready to walk out if they ask.

Lastly, you may also find yourself faced with a counter-offer from the employer you are leaving.  At first blush a counter-offer may seem flattering, even ideal.  What could be better than to stay where you are comfortable with a better salary, title and/or bonus.  However, I usually counsel my clients to be wary of counteroffers.  While there is nothing wrong with considering a counter-offer, before you accept it you must ask yourself why you were resigning in the first place.  Sometimes more money is not always the most important part of the employment relationship. 

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* Disclaimer: The contents of this page are for informational purposes only and nothing herein is intended to constitute legal advice nor should anything contained herein be taken or relied on as such. Each individual executive and employee has a unique set of facts and circumstances that the general discussion set forth above may be wholly inapplicable to. Only through consultation with a lawyer from our firm in which all of the facts and circumstances of an individual’s unique situation are explored and considered can a true legal assessment of your rights and remedies be ascertained. Any use of this information is taken solely at your own risk.