General Counsel Initiative Solutions
Holding on to Key Employees in a Competitive Environment
Situation
Two key employees with extremely close ties to the company’s primary customers had, years previously, signed non-competition agreements that are most likely unenforceable. This created an extremely dangerous (and previously unknown) threat to the company’s viability in the event a competitor recruited the employees and advised them of the flaws in their agreements – and the company operates in an industry where employee poaching has become a problem.
GCI Solution
Care must be taken not to alert the employees respecting their leverage, and replacement non-competes must be supported by new consideration. We recommend a vesting bonusdeferred compensation system based on company performance criteria for key employees, such as the employees in question. Programs of this type are based on objective criteria, they can sometimes be tax-advantaged, and they can successfully incentivize performance and, crucially, maximize key employee retention, especially in view of the vesting and deferred compensation aspects of the plan. In addition, a program of this type provides consideration for new employment agreements with non-competition and non-solicitation provisions that are more likely to be enforceable. While a key employee’s desire to stay with the company is always best, non-competition and non-solicitation agreements, while not perfect solutions, provide an excellent, additional line of defense. Include a provision permitting the company to disclose these provisions to any prospective employer, which will make it less likely that a prospective employer will be willing to hire an employee who is considering a position with a competitor.
General Counsel Initiative Solutions
Overcoming Land Use Issues that Prevent Business Growth
Situation
A business acquired a “split-zoned” property at a bargain price – the zoning on half the property permitted the business’ operations, but the other half did not. The business believed that it could operate on only half the property for several years and, in the interim, it could work toward a zoning change that would allow for an expansion. However, periodic status meetings with the business revealed that its growth was accelerating, and it needed to immediately determine whether it could expand its operations into the other half of its premises — if it were unable to do so, the business would either lose substantial revenue, or it would have to relocate at an exorbitant cost.
GCI Solution
Situations like these require an intimate knowledge of the township, well beyond the content of its zoning ordinances: understanding the views and protocols of the township’s supervisors, and the ability to put together a team of attorneys and consultants who have the most experience and credibility in the township, is the difference-maker. We successfully implemented a plan in which we obtained a variance allowing the client to use the entire property in the short term, and we then obtained a rezoning which allowed the client to use the entire property thereafter, subject to workable conditions designed to minimize the impact of the business on adjacent residential neighbors.
