As you look ahead to 2023 and think about employee retention, management and the needs of your workforce, it’s also a good time to review your employment agreements and ensure everything is in order.
Enforceable termination clauses are one of the best benefits an employer can get out of entering into a written employment agreement with an employee. While an employer likely hopes that they’ll never have to terminate an employee, that won’t likely be the reality for any longstanding business.
Recent judgments have muddied the waters on the importance of considering the relative sophistication of employees in determining the enforceability of termination provisions in employment contracts. Employee sophistication had previously been considered in interpreting whether termination provisions were valid, on the premise that inherent in the employer-employee relationship is an imbalance of power. This consideration may not be as significant in light of recent developments in case law.