How proactive employment agreements prevent offboarding pitfalls

Terminations are complex, often triggering emotional, legal, and administrative challenges for employees and employers. When post-termination questions go unanswered or lack clarity, the offboarding process can become unnecessarily lengthy and contentious, which in turn can lead to increased legal costs for both parties. When employee’s counsel doesn’t have access to the employee handbook or the full set of termination terms, how can discussion and negotiations proceed efficiently? Without a shared understanding of the rules, post-termination discussions inevitably drag on longer than necessary. By proactively drafting and regularly reviewing employment agreements, employers can set clear expectations and reduce disputes. This article outlines strategies for creating transparent, well-structured agreements that protect both the organization and its reputation.

Bonus and PTO payouts: Define the rules early

One of the most common sources of post-termination disputes involves compensation—specifically, bonuses and paid time off (PTO). You should clearly state whether these benefits are prorated, forfeited, or considered unearned upon termination. This is especially critical in industries where performance metrics drive bonus eligibility.