Employee salaries and benefits can be some of the greatest costs borne by a business. As a result, when a company faces financial hardship, they will often terminate positions to reduce their costs. However, many employers may not realize that the obligation to provide reasonable notice of termination could negate any short-term cost savings they hoped to realize.
Just like pre-nuptial agreements, employers should contemplate termination when their employment contracts are drafted. A recent case illustrates why it is important to include a legally enforceable termination clause in an employment contract for all employees.