On October 1, 2018, the Non-Competition Agreement Act went into effect in Massachusetts. While this new law provided employers and employees specific guidance with respect to noncompetition agreements, it did not apply to other restrictive agreements, including non-solicitation agreements, nondisclosure or confidentiality agreements, or invention assignment agreements. Additionally, it did not apply to noncompetition agreements made in connection with the sale of a business entity, where the party restricted by the agreement is a significant owner (member/partner) who will receive significant consideration from the sale. (View Article)
The Truth About Off the Clock Work: Personal Time, Professional Commitments and Wage and Hour Laws
We live in a world where work often spills over into our personal lives. The concept of “off the clock” work has become increasingly prevalent, blurring the boundaries between professional and personal time. In this blog post, we’ll explore what off the clock work really means, the difference between professional and personal time, and the laws that govern work time. We’ll also address the difference between workers who are engaged to wait” and those “waiting to be engaged.” That’s a thorny little wicket. (View Article)
Navigating a Layoff: Understanding What It Is, What to Do, Whether You Can Get More Severance, and How to Bounce Back
In today’s ever-changing job market, layoffs have become an unfortunate reality for many professionals. A layoff can be a distressing experience, with a lot of steps and a lotquestions. This blog aims to shed light on what a layoff entails, providing guidance on how to handle the situation, how to evaluate your severance and bounce back stronger than ever. (View Article)
Goldman Sachs Gender Discrimination Settlement: A Landmark for Workplace Equality
In May 2023, Goldman Sachs reached a significant settlement in a gender discrimination lawsuit. The casesheds light on the persistent challenges faced by women in the corporate world and serves as a turning point for addressing gender disparities in the workplace. This blog post explores the details of the gender discrimination settlement and the potential implications it holds for other companies and other women facing issues at work. (View Article)
A serious wage gap persists for women doctors
Bloomberg reported a study just released that shows women doctors make on average $20,000 to $50,000 less than men. It’s worth a read.
http://www.bloomberg.com/news/articles/2016-07-11/even-as-doctors-women-get-slapped-with-the-pay-gap
Call us if you’re experiencing similar problems at your workplace.
SEC Releases proposed compensation clawback rules
The Securities and Exchange Commission is considering new rules and regulations for compensation claw back policies. If the proposal is adopted, it will implement specific requirements from the Dodd-Frank Wall Street Reform and Consumer Protection Act, where companies listed with national securities exchanges and associations will have to develop and implement clawback policies.
In general, all listed companies must maintain a written claw back policy for the recoupment of certain compensation awarded to executive officers. Some of the specific terms of the executive summary include:
- The claw back policy is triggered when an accounting restatement corrects a material error in a previous financial statement
- The policy applies to incentive-based compensation granted within the preceding three years of the accounting restatement
- Fault or lack thereof is irrelevant to the implementation of the clause
Under the proposal, the claw back clause must contain the following elements:
- Description of the specific type of restatement that triggers the claw back clause;
- Definition of what “incentive-based compensation” is subject to recovery under the claw back clause;
- Statement of the specific time period covered in relation to when the compensation was received by the executive officer;
- Explanation regarding who is covered under the clause;
- Explanation about the amount of recovery authorized under the clause; and
- Statement that recoupment is mandatory unless it is “impracticable.” meaning that the cost of recovering exceeds the total amount of recovered compensation.
For questions about this proposed regulation and possible implications for your company, contact our office to speak with an attorney.
Philip Gordon testifies in favor of new Massachusetts Noncompete Bill
Massachusetts is set to revamp its existing noncompete laws and pass new legislation favorable to employees, as well as companies seeking to grow in Massachusetts. Philip Gordon spoke in front of Senators and Representatives about the proposed legislation, and the bill eventually passed in the Massachusetts Senate by 32 votes to 7.
The proposed changes to noncompete laws in Massachusetts would ban those clauses for workers classified as nonexempt under the Fair Labor Standards Act (FLSA). Exempt employees – typically, professionals, administrators or executives – would continue to be subject to noncompete clauses, but with more predictable results. Noncompetes now would last only for six months, and they would be valid only if limited to a predefined geographic region and specific employment duties. Thus, if an employee finds new employment after six months, in a different area, or with different responsibilities, they would be allowed to begin working immediately.
Other major changes include a requirement that advance notice of any noncompete be provided to individuals prior to employment, and that the clauses themselves be clear and specific.
Click here to view the latest version of Massachusetts Noncompete bill.
If you have any questions, please contact us.
Employment Agreements: A Rundown of the Top 10 Pointers
Executive contracts often include a range of options, clauses, benefits, restrictions and obligations. We represent employees at all levels in the negotiation process, and this post will share our thoughts on some of those provisions.
The range is broad: non-qualified stock, incentive stock, incentive bonuses, pay for performance, deferred compensation, retirement plans, benefit plans, business expenses, choice of laws, arbitration clauses, non-competes, non-solicitations, confidentiality clauses, termination provisions, residency requirements, and post-employment cooperation agreements…to name a few of the more common provisions.
Below, we outline some of the main parts of employment agreements and answer some of the most common questions that we get asked. Of course, feel free to contact us with any other questions you may have.
- The general trend in executive pay is moving towards a proportionally lower base salary and higher pay-for-performance rewards. Expect to see more incentive based clauses.
- A second general trend in employment agreements is an effort to lock employees into long term arrangements or lock them out of the industry.
- Severance packages are back, but frequently misunderstood. These provisions should be negotiated at the outset with particular care to definitions of cause and good reason, as well as cure periods, conditions to payouts and post-employment obligations.
- Change in control provisions protect employees in the event a company is sold or new management takes over. These clauses often provide for acceleration in compensation and equity vesting, and should be considered whether or not the prospect of such an event is immediate.
- Incentive Stock Options (ISOs) are agreements providing an employee the right to buy stock, ie. exercising the option. This also comes with a tax benefit, but there are several important limitations including the amount of stock that can be granted this way.
- Non-Qualified Stock Options (NSOs) are similar to ISOs, but they do not qualify for the same preferential tax treatment and the have fewer restrictions.
- Restricted stock is an actual share of stock owned by an individual, but subject to certain company mandated restrictions and repurchase rights. These restrictions usually lapse over time, with the employee’s rights in the stock vesting at each milestone.
- Phantom stock is not actual equity, per se, but it gives the executive the benefits of stock without owning it. For example, if the actual stock value increases, so will the phantom stock.
- Stock Appreciation Rights (SARs) are not actual stock, either, but these contracts typically result in a bonus or other payment equivalent to the increase in the price of an actual share.
- Employment at will is often the rule, but there are many rights depending on the contracts, if any, but there are also rights under laws protecting against discrimination, retaliation and whistleblowing, all of which merit a view.
If you’re negotiating an employment relationship, or termination, contact us today.
Call us today at 800-403-7755 to schedule a free consultation with our team of talented attorneys.
Click here to view Gordon Law Groups FAQs on executive compensation.
8 Things You Should Know About Executive Compensation
1) Companies are shifting towards long term, multi-year goals, and executive compensation is following suit, often setting compensation based upon long term success metrics.
2) Executive Compensation is varied. It often consists of a combination of salary, bonuses, equity, benefits, and other perks, and it typically based on company performance, length of employment, benchmark data, market practices, individual performance, and other factors.
2) Executive Compensation is varied. It often consists of a combination of salary, bonuses, equity, benefits, and other perks, and it typically based on company performance, length of employment, benchmark data, market practices, individual performance, and other factors.3) Phantom Stock and Stock Settled Appreciation Rights are compensation varieties that allows companies to offer executives the benefits of stock without actually owning real stock. If the actual stock increases in value, then the phantom stock held by the employee also increases in value. Similarly, stock settled appreciation rights are where an executive receives a payment based on the amount the stock has increased. 
4) Dodd-Frank reform allows shareholders of a public corporation vote on executive compensation and recommend whether executives are receiving a fair amount of compensation. However, for the moment at least, this vote remains non-binding.
5) Executives are covered by the same laws as normal employees. Just as employees must be paid all wages earned, that is no different for executives. This does not include minimum wage or overtime laws but does include executive compensation.
4) Dodd-Frank reform allows shareholders of a public corporation vote on executive compensation and recommend whether executives are receiving a fair amount of compensation. However, for the moment at least, this vote remains non-binding.
5) Executives are covered by the same laws as normal employees. Just as employees must be paid all wages earned, that is no different for executives. This does not include minimum wage or overtime laws but does include executive compensation.6) It is always important to understand and often actually negotiate your package. Do this to ensure you get what you deserve, but you also might do this to demonstrate you’re the type of executive they’re looking for. Make concessions and design the package how you would like it to be, but also design your efforts to convey your work style.
7) Know your value. Do some discovery work and try to find out what other executives at rival companies are worth. This will help you determine your value to your company.
8) Consult an expert. We highly recommend talking to an attorney who has experience in executive advocacy. This will allow you to receive a fair and profitable package and avoid any messy situations that we see frequently, ranging from the taxation of equity to severance packages.
If you have any other questions surrounding executive compensation, check out our FAQs page or contact us today.
If you have any other questions surrounding executive compensation, check out our FAQs page or contact us today. Severance Agreements and Releases: A Breakdown
You never walk into your dream executive job thinking about an exit strategy. But there is a distinct possibility that you may be asked to leave your company for any number of reasons. Rather than being blindsided by this, you can agree to a severance package with your employment.
Why would a company agree to a severance arrangement? They can prevent expensive litigation between employers and terminated employees. The agreement itself is just a contract between an employer and employee waiving certain legal rights of the employee in exchange for additional compensation or other benefits provided by the employer. On one hand, for the employee, the positive side of severance benefits may include large one-time payments, continued health benefits, additional salary payments, letters of recommendation or other offers.
On the other hand, severance packages may also include critical non-compete and confidentiality agreements, as well as releases requiring the employee to give up any claims she may have forever. Before signing such an agreement, be knowledgeable of the effects those provisions may have on your future ability to obtain employment.
If you’ve been offered severance in exchange for a release, contact us today.
Representing Executives 
