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Birmingham Bar Associations Bulletin Summer 2015

Employment Law | Referral Update Negotiating An Executive’s Employment Agreement continued from page 16 in mind the potential severance benefi ts for the executive’s eventual departure. In at-will employment agreements, the executive should seek specifi c terms of severance within the employment agreement itself, especially absent good cause for discharge or resignation without good reason. Where fi xed-term agreements are involved, the executive should resist any attempt of the employer to limit the severance benefi ts to an amount less than that which the executive would have received for the entire remainder of the agreement. Th e executive should also seek to ensure that his medical, dental, life and disability insurance benefi ts will be continued for the length of the severance period, at the employer’s expense, if possible, and to spell out the calculation, payment and prorating of as-yet-unpaid bonuses eff ec- tive at the time of separation as well as any accrued but unused vacation time. Alternative Dispute Resolution Both the employer and the executive may want to include a provision in the executive’s employment agreement seeking alternative dispute resolution in the event of disputes arising over the agreement. Mediation or arbitration, or both, is likely to be quicker, cheaper and more private for the executive and the employer. Usually a provision requiring mediation, followed by arbitration if unsuccessful, works best. Th e language should specify that the neutral be acceptable to both the executive and the employer, and should specify who is responsible for paying for the neutral, what law will govern, and where it will take place. Given the high cost of arbitration, the executive should seek to obtain employer payment of all or most of the costs. In Conclusion An executive’s lawyer’s participation need not be open. In fact, many executives may be better off starting and even continuing negotiations directly with their prospective employers, rather than relying on lawyer-to-lawyer bargaining. Of course, this does not mean that counsel should play a minor role. Lawyers can be extremely helpful to executives in advising them in the background while the executive is dealing directly with the employer. But irrespective of the scope of counsel’s involvement, the issues addressed in this article should assist counsel in obtaining an all-inclusive, carefully-considered employment agreement for the executive. G AN UPDATE: Referral of Cases to U.S. Magistrate Judges in the Northern District continued from page 31 civil cases, and are “in demand” to mediate. Each district judge can only refer four (4) civil cases per year to a randomly-drawn magistrate judge. However, for those cases directly assigned to magistrate judges, if consent given, they will be available on an unlimited basis for mediation by a magistrate judge. Th e incentive to litigate before the magistrate judges here is plain: if you want to have a free, fair, and excellent mediator, consider consenting to magistrate judge jurisdiction over the case. Th e Magistrate Judges’ Streamlined Procedures All 5 magistrate judges will issue uniform Initial Orders, eliminate “Appendix 2” for briefi ng, and otherwise harmonize procedures before them. Th is predictable handling of civil matters will allow for continued management of their Social Security, criminal, and pretrial matters referred to them as a matter of course (which will continue). Conclusion Th e Northern District’s revisions of utilization of magistrate judges are signifi cant, and any member of the Association with a civil matter directly assigned to a magistrate judge is well served to counsel their client on these procedural nuances – the choice to consent may just have a material eff ect on the result they obtain. G 38 Birmingham Bar Association


Birmingham Bar Associations Bulletin Summer 2015
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