Specific Terms and Provisions Archives

Voluntary – Key Words & Phrases

Published on February 19th, 2019 by Alan L. Sklover

Sklover Working Wisdom keywords and phrases

Be on the lookout for . . .

“Voluntary,” as in “Voluntary Departure,” “Voluntary Resignation”
or “Voluntary Waiver”

You’re quite likely to find the word “voluntary” in several work-related legal documents. If you do notice it, that word may be very advantageous to you.

Generally speaking, “voluntary” means “done on one’s own free will.” It is synonymous with discretionary, unforced and optional. In legal documents, it often suggests that the act described was not required, not coerced, and not demanded.

Let’s say that, according to your employer’s Annual Bonus Plan, you are not entitled to your annual bonus if you “voluntarily” resign before the day it is paid. What if, two weeks before bonus payment date, you resigned and left your job in fear that your boss might beat you up in one of his infamous uncontrolled rages?

Was your departure “voluntary?” I’d say no. Are you entitled to your annual bonus? I’d say yes, although I’m confident that most employers would disagree.

You have a strong, reasonable and likely winning argument that the bonus is yours, so long as you spot, appreciate and point to the word “voluntary.”

In Repayment Agreements, you might promise to repay your employer in, as examples, a Sign-on Bonus Agreement, a Relocation Expenses Policy, or a Tuition Assistance Plan if you “voluntarily” leave before two years of service. What if you left earlier than that because, all of a sudden, your salary was reduced by 40%, and your family likes to eat three meals a day? (Some kids demand 4 or 5!!)

Is feeding your hungry family “voluntary?” I’d say No. Was your departure to take a better paying job truly “voluntary?” I’d say No. For this reason, you have a very good, and probably winning, basis to argue, with likely success, that your repayment is not required.

So, in this circumstance, too, you may very well not have to repay any sign-on bonus, educational assistance, etc., so long, that is, as you spot, appreciate and raise in your defense the word “voluntary.”

The same goes for whether a Non-Compete Agreement is valid or void, according to its own words. If the non-compete says it is valid if you “voluntarily” leave your job, and you can show that you are allergic to the new paint used throughout the office, then it is void as to you, so long, that is, as you spot, appreciate and raise the word “voluntary.”

There are many other legal documents that may contain the word “voluntary.” Look for “voluntary” in any and every workplace document, whether in an agreement, a company policy, an Employee Handbook, Stock Award, or other document.

You may be VERY GLAD you did.

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The Ambiguities Clause . . . What’s That?

Published on March 20th, 2018 by Alan L. Sklover

“Close your eyes to see clearly.”

– Ancient Zen Saying

ACTUAL CASE HISTORIES: Something I have learned over decades of being an attorney is that the law is mostly common sense, a kind of practical wisdom, applicable to different situations, handed down from one generation to the next. Despite the many, varied and often deserved criticisms of the legal system, overall, it works. I believe that more each day.

Here is an illustration: If a contract provision seems unclear, then Courts will, as a general rule, interpret that provision against the interests of the party whose lawyer drafted it. This is referred to as the “Interpretation Against the Drafter Rule” of contract analysis.

What is the common sense underlying the “Interpretation Against the Drafter Rule”? It rewards clear contract drafting, and punishes lazy or sleazy contract drafting, so that, hopefully, there will be fewer controversies over what contracts mean, and less need for the time, attention and costs of attorneys and Courts. This is a good example of common sense, applied to a common problem, in the common interest.

To get around the “Interpretation Against the Drafter Rule,” some lawyers insert a clause into the contracts they draft that provides, in effect, “The parties agree that no one party drafted this contract, but we both contributed to it, and, so, the ‘Interpretation Against the Drafter Rule’ doesn’t apply to this contract.” This kind of clause, most often called an “Ambiguity Clause,” is nothing more or less than an attempt to evade the “Interpretation Against the Drafter Rule,” and thus accountability for their sloppiness or sleaziness. The Ambiguity Clause seeks to take away risk of the consequences of ambiguity from the shoulders of the drafter, and place it on the shoulders of the non-drafter.

Since most workplace agreements are drafted by employers’ lawyers, and not by employees’ lawyers, Ambiguities Clauses are especially common in workplace agreements. Thus, it is wise for employees and their lawyers to watch out for the Ambiguity Clause, and to consider taking certain precautions to address the additional risk it represents.

LESSON TO LEARN: This is what a typical “Ambiguity Clause” looks like:

    Ambiguities: The parties agree that this agreement was drafted by the lawyers for both parties, and so neither party can be alleged to be the primary drafter. Accordingly, any rule or law of contract interpretation that would require interpretation against the interests of one of the parties is inapplicable when interpreting this agreement, and in all events.”

Here is another common version of an “Ambiguities Clause,” with a different title:

    Construction: The parties acknowledge and agree that any statute, principle, or rule of contract construction that requires that ambiguities are to be resolved against the drafting party, shall not be employed in the interpretation of this Agreement.”

If you notice an “Ambiguities Clause” in any workplace agreement you are being asked to sign, now you know what it means, and you are aware that it being there leans a bit against your interests, and so you are well-advised to be on guard a bit more than usual for ambiguities in the agreement, before signing it.

WHAT YOU CAN DO: If you are considering signing a workplace agreement of any kind, it is always prudent and wise to read it over carefully before you sign it. If it contains an “Ambiguities Clause,” be even a bit more cautious. If you notice an “Ambiguities Clause” in the agreement under your consideration, here are some ideas, tips and thoughts to bear in mind:
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Know Who Your Employer Is? – You May Be Wrong.

Published on March 22nd, 2017 by Alan L. Sklover

“During the day, I don’t believe in ghosts.
At night, I’m a little bit more open-minded.”

– Author Unknown

Case History #1: Newly Established Entity: George interviewed for a position with a well-known sales and marketing agency headquartered in Italy. After being told he was their first choice candidate, basic terms were successfully negotiated. George was then presented with an Offer Letter to sign, which he forwarded to us for review. His email said, “Looks fine to me. All terms are what was agreed to. I will be opening a U.S. office. Two year commitment. Please look for any legal issues. I resigned my present position yesterday.”

One “legal issue” really troubled us: the name of the “Employer” in the Offer Letter was very similar to the Italy-based company, but it was slightly different. Our internet research revealed that the “Employer” listed in the Offer Letter was not the same employer George thought he would be employed by. Instead, it was a new company, established in the U.S. just two weeks earlier by the Italian company, with no bank account, no assets and no credit. Sure enough, George’s Offer Letter represented far less of a “commitment,” than George had thought.

As we explained to George, at any time it wished, the Italian parent company could decide that the new U.S. company was not meeting expectations, simply close it down, and “walk away.” Should that happen, George would have nowhere to turn for anything he was owed, and his “two year commitment” was in reality no more secure than a mere handshake.

Case History #2 – “Affiliates” Included: After experiencing sexual harassment at her job in the hospitality industry, Danielle filed a complaint with HR, and when she decided to leave, she was offered a severance package. The severance agreement included a provision that Danielle would not disparage or criticize the “company” to others, and the “company” would not disparage or criticize her to “others.” (That last word was key.)

A careful reading of the first line in the severance agreement revealed that the “Employer” was defined as “Colossal Hotels, it parents and its affiliates.” After leaving, Danielle was shocked to find out that many hotel companies she considering working for had received a letter telling them that Danielle had been “requested to leave, immediately if not sooner.”

When we wrote to her former employer, threatening a lawsuit, they responded by sharing with us that the 12 hotel companies that received that letter were all “affiliates” and, thus were all part of the “Employer,” and that none were “others” to whom they were prohibited from disparaging Danielle. The definition of “Employer” permitted them to say anything they wanted, however disparaging, to those 12 companies.

Case History #3 – “Leased” Employee: Jim, an attorney who had been working for a large Philadelphia law firm for nine months, decided to purchase a home. He put down a significant down payment, and submitted a mortgage application. Just days before the closing was scheduled to take place, Jim quite surprised when he was notified that he was rejected for the mortgage loan because the bank was unable to verify his employment.

It turned out that Jim was recruited for his law firm position by a small recruiting agency headquartered in another state, and that “paperwork” he never saw provided that he was technically an employee of the recruiting agency, and not the law firm. He had been told something along these lines at the time, but he didn’t pay much attention to the “details.” Because the recruiting agency had, itself, several times defaulted on loans, and had once even declared bankruptcy, Jim’s mortgage lender viewed his employment as insecure, and chose not to make the mortgage loan to him. Unable to secure the mortgage loan in time to close the house purchase, Jim lost his entire down payment.

LESSON TO LEARN: Far more employees than you might imagine are not aware of exactly who their true employer is, even when the name of that employer is prominently displayed on the front door to the office. For those who are given an Offer Letter or an Employment Agreement, almost always their eyes look at only one thing: how much they are being paid. They don’t look nearly as carefully at who is their “employer.” For those who are not given Offer Letters or Employment Agreements, they are often satisfied by “the name on the door,” or “the name on the stationery.”

Does it really matter? Well, for most people, and in most circumstances, it probably doesn’t. But, it sure did to George, Danielle and Jim. Depending on your circumstances, it may well matter to you, too. It can’t hurt to keep a sharp eye out for who, exactly, it is you work for, and how “Employer” is defined in any document given to you just in case.”

The implications could be huge, including your job security and rights to benefits, compensation, and stock or stock options. It would be a shame if you worked hard for 10 years under the mistaken belief that doing so made you eligible for a pension, only later to find out that you were not truly employed by the company that offers it, and thus you are truly “pension-less.”

WHAT YOU CAN DO: Take the time to consider who it is – or who it may not be – that is your true employer. For example:
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Force Majeure – Key Words & Phrases

Published on November 16th, 2016 by Alan L. Sklover

Key Words

What is the meaning of:

Force Majeure?

Many business-related contracts, including employment agreements and independent contractor agreements, contain a section entitled “Force Majeure.” It is a concept that you should be aware of, understand, and, depending on the circumstances, either beware of or take advantage of.

“Force majeure” is a French phrase that translates literally to “superior force.” In general terms, it means that a party to an agreement who cannot provide what it promised to provide as a result of “uncontrollable events” may be free of responsibility for failure to do so.

In the paragraph above, “cannot provide what it promised” is not meant to be the same thing as “became impossible,” but somewhat broader. It may even include “has become far beyond reasonable to expect.”

Examples of “force majeure events” include, war, labor stoppages, extreme weather, natural disasters, terrorist attacks and epidemics.

Parties to contracts sometimes even take the position that “force majeure events” are so broad as to include spikes in interest rates, stock market swoons, and minor changes in law, but those events are not generally accepted in courts, unless unique circumstances would warrant it.

While “force majeure events” rarely happen, in this era of climate change, political instability, and overall increased uncertainty, one just might happen to you.

Here is an example of a Force Majeure provision in a contract:

“If a Force Majeure Event as defined above, makes a party to this contract unable to comply with one of its obligations, that inability will not constitute a breach of contract if (a) that party’s reasonable efforts would not help, and (b) a reasonable party would not have been likely to have maintained contingency provisions to prevent the inability in question.”

Most people, including lawyers, don’t pay much attention to “force majeure” provisions in contracts. Wiser people seek to broaden the definition or examples of a force majeure event, or limit, as would benefit that person.

For example, if you are promoting a concert, you should try to insert into the “force majeure” definition the unavailability of the concert hall due to fire or water leak. On the other hand, if you have been contracted to sing at a concert, you would be wise to try to insert into the “force majeure” definition “a sore throat” and, perhaps, also, “a force majeure will not include the unavailability of the concert hall for any reason.”

Get the picture? You read about it here. Knowledge is power. Forewarned is forearmed. That’s what SkloverWorkingWisdom™ is all about.

© 2016 Alan L. Sklover. All Rights Reserved. Commercial Use Strictly Prohibited

For a complete list of our Model Letters, Memos, Checklists and Form Agreements, just [click here.]

Pay or Play

Published on July 26th, 2016 by Alan L. Sklover

Question: Dear Alan: I was recently hired by a talent agency in Los Angeles as an Assistant to an agent. The offer letter I received says that it’s for one year, and is “Pay or Play.” Can you tell me what that means?

Altadena, California

Answer: Dear Randy: A “Pay or Play” provision is common in the sports, entertainment and media industries, and is becoming more common elsewhere. Even in those industries where it is common, it is often misunderstood.
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Alan L. Sklover

Alan L. Sklover

Employment Attorney
and Career Strategist
for over 35 years

Job Security and Career Success now depend on knowing how to navigate and negotiate to gain the most for your skills, time and efforts. Learn the trade secrets and 'uncommon common sense' of Attorney Alan L. Sklover, the leading authority on "Negotiating for Yourself at Work™".

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