“Term” or “Duration” Clause – Here are 10 Alternative Improvements

“I’ve been on a calendar, but I have never been on time.”

–       Marilyn Monroe

ACTUAL “CASE HISTORIES”: How long is your employment “safe” for? Can you be let go without notice, or are you one of those people who have the security of a “term” contract? Or are you “something in between?”

Most employees believe that they have only two “choices” in how long their employment is meant to last: either (i) as an “at will” employee – which means that either the employee or the employer can end the relation at any time – or (ii) there can be a contract for a set period of time, such as one, two or three years (each called a “term.”)

The truth is that there are many different and creative alternatives to being either “at will” or having a “set term” of employment. And a “further truth” is that many of the “creative alternatives” regarding duration of employment might better suit the circumstances of many employees . . . if only they knew they could “be creative” in this respect.

The “ultimate truth” in this regard is that, when negotiating employment, or negotiating continued employment, you can be as creative as you dare to be. Whatever makes sense to you, and makes sense to your employer, is fine for both. As we always say, “In the varieties of employment relations, the only limits are the limits to your creativity and, simply, ‘what works.’”

LESSON TO LEARN: Never fear to dare to explore various alternatives when it comes to the specifics of your employment relation, and the length of time it is to last, in particular. And never fear presenting alternative ideas that may better suit your own needs regarding (a) security in your life, and (b) flexibility in your career.

Not being afraid to explore or propose alternative arrangements is especially important when it comes to the most basic aspects of your employment relation, including (a) your duties, (b) your compensation, (c) the duration of your relation, (that is, “term”), and (d) your benefits. Just as singer Paul Simon sang, there are “Fifty Ways to Leave Your Lover,” bear in mind that there are at least fifty ways to negotiate the “term” of your employment.

Here are “Ten Term Alternatives” to consider; there are many, many more possibilities. Consider, as well, combining aspects of each into unique arrangements that might suit your own needs. The important thing to remember is that “creativity and practicality rule.”

For great info and insight, consider viewing our 12-minute Sklover-On-Demand Video entitled “Can I Really Negotiate with My Boss?” To do so, just [click here.]

WHAT YOU CAN DO: Whether you are negotiating new employment, re-negotiating existing employment, or just seeking more job security or less career commitment, consider these “Ten   Term Alternatives.”

1. No Fixed Term (also known as “At Will”) – This is the most common employment arrangement, in which both the employee and the employer are free to end their employment relation at any time, with perhaps 95% of employees fitting into this description.

Note that “at will” does NOT mean that the employer can end the employment relation for “any reason.” There are literally hundreds of illegal reasons employers cannot terminate an employment relation. “At will” employment is just like “dating,” and has none of the commitment we see in “marriage.”

Example: “This employment relation is ‘at will’ which means that either the employee or the employer may terminate the relation at any time, without prior notice to the other.”

2. No Fixed Term (also known as “at will”), but with Minimum Termination Notice Required – This is a variation of “At Will” employment, in which either employee or employer may terminate the employment relation, but either one of them, or both, must give a minimum amount of pre-termination notice to the other. More commonly, employers require at least two or four weeks’ advance written notice of resignation from employees, but try not to make such a commitment to provide advance notice, themselves.

Even when Employers agree to give prior notice of termination, they often fail to do so, but instead provide employees with payment for that period of time. Technically, that is a breach of contract, because a two-week paycheck is not as valuable as are two weeks of continued employment, which permits the employee to look for other employment while employed, and enjoying all benefits of employment, as well.   

Example: “The employment relation is ‘at will’ which means that either the employee or the employer may terminate the relation at any time; however, the employee must provide at least two weeks’ prior notice of resignation.” 

To help you in resigning, we offer Two Model Resignation Letters: What to Say, and How to Say It.™ To obtain your copies, to adapt to your own facts and circumstances, just [click here.] – Delivered by Email – Instantly! 

3. No Fixed Term, but “So Long As . . . ” – This period of employment entails no fixed term of employment, but also does not permit the employee or the employer to end the relation at any time they wish. Instead, it makes the period of employment “so long as” some other relation, circumstance or event continues, which might be one minute and might be one hundred years.

In a famous case several years ago, pro boxer Mike Tyson agreed to employ his manager “so long as” Tyson continued to be a professional boxer. Later, Tyson changed his mind, and his lawyers claimed that “so long as” was too indefinite a provision to enforce. New York State’s highest Court decided otherwise, finding nothing illogical, unfair or indefinite about that “term,” for it was not difficult at all to determine whether Tyson was still fighting professionally. 

Example: “Martin will be employed as the Manager of the Crabcake Restaurant not for any set period of time, but for so long as the Crabcake Restaurant is in business at its present location and is owned by a member of the Monahan family, regardless of the restaurant name used.”

4. Fixed Term – This is what most people think about when they say “The employee has an employment contract.” It is a commitment by an employer to maintain an employee as an employee for a set period of time, and a corresponding commitment by the employee to remain for that period, too. Even when there is a “fixed term,” if an employee either engages in gross misconduct, or fails to provide the services agreed upon, the employer can terminate the employment relation, but the employer must provide the facts, events or circumstances to back up that step, or else suffer the potential legal consequences.

Example: “The period of employment during which the Employee will be employed and the Employer will employ the Employee, will be from January 15, 2014 through January 14, 2015.” 

5. Fixed Term, but Terminable on Certain Conditions – This variation of the fixed term provides the employee and employer with the security of knowing how long the employment relation will probably endure, but the flexibility to end the commitment in certain circumstances. 

Example: “Gertrude will be employed as the taxi dispatcher for the Maloney Taxi Company for a period of two years commencing November 1, 2015; however, in the event that both (a) the Maloney Taxi Company is sold to new owners, and (b) Gertrude is paid three months of salary as severance by Maloney Taxi Company, the Maloney Taxi Company may (but will not be required to) terminate Gertrude’s employment on three weeks’ advance written notice.”      

6. Fixed Term, Automatically Renewed (Unless Either Gives Notice of Non-Renewal) – This is another variation of fixed term, but it is used where the parties, on the one hand, expect to continue the relation after the fixed term, but (b) are not certain of that expectation, and so want a “way out” if circumstances suggest that. It provides a degree of security, but not absolute security. This “term” provision usually requires that the “notice of non-renewal” be sent at least two, three or even sometimes six months before the then-current term expires, to give both sides sufficient transition time. This is sometimes also called an “evergreen” contract.

Example: “The term of the employee’s employment will be for two years, and upon the expiration of the initial two-year period and each subsequent two-year period thereafter will automatically extend for another two-year period unless either the employee or the employer provides written notice of non-renewal at least ninety (90) days prior to the next ensuing expiration date.”

7. Fixed Term with Option to Extend or Renew – Although not all that common, sometimes we see this alternative “term” of employment used. When used, it is seen most often where the employer seeks the comfort of knowing the employee will be in its employ for at least a certain period of time, say, for as long as it thinks a particular client will need the employee’s special expertise, and then – only if needed – for the extra period.  

Sometimes, too, an employee views this alternative “term” to be preferable where an “outside circumstance” might make having an option to renew good for him or her.

Example: Imagine, for example, that Mr. Lee is a very well-known Municipal Bond Analyst, sought after by many financial firms. Imagine, too, that his wife, Mrs. Lee, will be attending medical school in Minneapolis for five years, and then expects to relocate to another city for her residency. Mr. Lee accepts a position at a Minneapolis-headquartered financial services firm, and requests (a) a five-year term of employment, to coincide with his wife’s anticipated medical school attendance, and (b) an option to renew for another two years, just in case she remains in Minneapolis for her residency. 

8. Fixed Term or No Fixed Term, but with “Garden Leave” – It is not at all unusual these days to see an employee, whether or not “at will” or bound to a “fixed term” contract, nonetheless (a) obligated to give an extended notice of resignation (sometimes as long as six months, but more commonly 60 or 90 days), during which (b) the employer can decide whether or not to (c) have the employee stay the full notice period or depart sooner.

These provisions, commonly called “Garden Leave” provisions, provide the employer the ability to keep the employee away from important clients, the employee’s colleagues, and from starting new jobs, while also permitting the employer to terminate the employee at any time, if it chooses. From the employee’s point of view, this makes it near impossible to commit to a new job, as most new employers will not wait 180 or even 90 days to fill a position. These provisions are among the latest attempts by employers to control both the value and the risks that their “human capital” represent.

Example: “The employee and employer agree that, upon resignation by the employee for any reason, or termination of the relation by the employer for any reason, the employee will continue to be employed for an additional 180 days, during which time she will either stay at home, or come to the office, at the employer’s discretion, but in all events have no contact with colleagues or customers unless requested to do so in writing by the employer. Further, the employer may, in its discretion, elect to end the employment relation at any time during the 180-day period, upon one day written notice, in which event the employment relation, salary, benefits and all other aspects of the employment relation will cease immediately.”    

9. Until Project Completion – It is increasingly common to see the duration of anticipated employment to be “until substantial completion of the project,” with the phrase “substantial completion” defined using rather objective criteria. Sometimes referred to as “Project Employment,” this is intended to afford the employer the ability to use the employee’s services when it needs, but only so long as it needs, an increasingly popular concept among employers.  

Example: “Hezekiah’s employment with the Neerie Basketball Camp will commence on June 1, 2015 and continue until Substantial Completion of the 2015 Camp Promotion Project. For these purposes, “Substantial Completion” will be defined as: (a) mailing out of no less than 5,000 brochures, (b) airing of no less than 15 local television advertisements, and (c) registration of at least 20 new campers.”    

Looking for a New Job? We offer a 152-Point Master Checklist of Employment Negotiation Items to help you “remember everything and not forget anything else.” To obtain a copy, just [click here.] Delivered by Email – Instantly! 

10. Lifetime – Though not at all that common, we do see “lifetime” contracts used when the employee is so respected, valued and an esteemed person that the employer does not want to do anything that might end up in possible loss of their association. When I think of “lifetime” contracts, I think of (a) famous professors, (b) long-time, successful CEO’s, and (c) honored members of the Clergy, all of whom may be viewed as bringing honor to the institution by their mere presence.  

Example: “In light of Pastor Kennedy’s 25 years of service, his employment by the Congregation shall continue henceforth for his entire natural life, regardless of infirmity or disability.”

Summary: In the employment relation, as in any other “business” relation, most people focus on their “rewards” and potential “rewards,” including title, compensation, benefits, vacation, ownership opportunity, and the like. However, seasoned veterans all know that it is the “risks” of the relation or business deal that should garner more of your attention and consideration. What may be the “term” of your employment may not be very important to you now, but it sure will be if the “term” is cut short, without your expectation. Your opportunity to understand your “term” of employment, to affect your “term” of employment, and to plan for your “term” of employment is here, today.

P.S.: For those who might be helped by personal attention and counsel, Al Sklover is available for confidential telephone consultations of 30-minutes, 60-minutes, or two-hours. For more info [click here.]

SkloverWorkingWisdom™ emphasizes smart negotiating – and navigating – for yourself at work. Negotiation and navigation of work and career issues requires that you think “out of the box,” and build value and avoid risks at every point in your career. We strive to help you understand what is commonly before you – traps and pitfalls, included – and to avoid the bumps in the road. Understanding what your employment relation entails, and what its “term” is and means, is just one good example of that.

Always be proactive. Always be creative. Always be persistent. Always be vigilant. And always do what you can to achieve for yourself, your family, and your career. Take all available steps to increase and secure employment “rewards” and eliminate or reduce employment “risks.” That’s what SkloverWorkingWisdom™ is all about.

*A note about our Actual Case Histories: In order to preserve client confidences, and protect client identities, we alter certain facts, including the name, age, gender, position, date, geographical location, and industry of our clients. The essential facts, the point illustrated and the lesson to be learned, remain actual.

Please Note: This Email Newsletter is not legal advice, but only an effort to provide generalized information about important topics related to employment and the law. Legal advice can only be rendered after formal retention of counsel, and must take into account the facts and circumstances of a particular case. Those in need of legal advice, counsel or representation should retain competent legal counsel licensed to practice law in their locale.

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