After receiving a job offer, most people are thrilled! It feels like your hard work and effort has paid off. However, for most executives and professionals the final step involves accepting an employment agreement.
For people who are not in the legal field, reviewing employment agreements can be confusing and stressful. In this episode, you will learn more about what to expect from employment agreements and executive contracts.
Our host and CEO Porschia, alongside our guest, Richard Tuschman, will share their insight on the significance of employment agreements and offer letters.
Richard D. Tuschman is the Managing Partner of Richard D. Tuschman, P.A. in Davie, Florida. He has more than 30 years of experience practicing labor and employment law. Richard is Board Certified in labor and employment law by the Florida bar, is AV-rated by Marindale-Hubbell and has been recognized in The Best Lawyers in America and Super Lawyers Magazine.
What you’ll learn:
- Different types of employment agreements or offer letters
- Aspects of standard employment agreements and executive contracts
- What non-compete clauses are and aspects that can be negotiated
- Red flags executives and professionals should be on the lookout for in employment agreements
- Importance of understanding the employment agreement you are presented with
As a thank you for listening to this episode of the Career 101 Podcast, we are sharing our FREE master class – Career 911: Solving the Top 5 Challenges Executives and Professionals Have! It’s a training based on solving the common problems our clients have experienced to reach their goals. You can get access to the master class here!
Episode Transcript
Porschia: [00:00:00] Today we are talking about Employment Law 102, Employment Agreements with Richard Tushman. Richard D. Tushman is the managing partner of Richard D. Tushman, PA, in Davie, Florida. Mr. Tushman has more than 30 years of experience practicing labor and employment law in Florida. He represents clients in Fair Labor Standards Act and Family and Medical Leave Act cases, as well as cases alleging [00:01:00] employment discrimination.
He also handles cases involving whistleblowing, restrictive covenants. breach of contract and trade secrets. Mr. Tushman regularly appears before federal and state agencies, including the Equal Employment Opportunity Commission, or EEOC, the U. S. Department of Labor, and the Occupational Safety and Health Administration.
Mr. Tushman is board certified in labor and employment law by the Florida Bar, is AV rated by Martindale Hubbell, and has been recognized in the Best Lawyers in America and Super Lawyers magazine. He holds a BA from Franklin and Marshall College and earned his JD with honors from the George Washington University Law School.
Very great bio, Richard. How are you
Richard: today? Some of it is true. I’m doing great, Portia. Thank you. Good afternoon. Great.
Porschia: I’m excited to have you with us to discuss [00:02:00] employment law and specifically employment agreements. But first, we want to know a little bit more about you. So tell me about seven year old Richard.
Richard: Seven year old? Wow. I was, I grew up in New Jersey. And it was a different time then, I mean, we didn’t have the internet. Fifty six seven years old, boy, I was, it was the early seventies, and I was going to the, in the summer, the swim club, which was the community pool, which probably, I probably started around when I was about seven years old.
I guess I was playing basketball and baseball, and spending a lot of time outside. We didn’t have video games, we didn’t have the internet, we didn’t have cell phones yeah, I was playing outside with friends. Two of whom I get together with regularly here in South Florida because they now live down here near me.
I’m still in touch with those guys.
Porschia: Yeah that’s very cool. And yes, a lot of New Yorkers and people from New Jersey [00:03:00] moved to South Florida as either their vacation home or their permanent home after a certain period of time.
Richard: Right. Yeah, it’s very common. Still, and they’re still moving down here.
Porschia: Yeah. Way back then, Richard, when you were seven, what did you want to be when you grew up?
Richard: I probably, at that time, I was into sports. I probably wanted to be a professional athlete. You realize soon enough, you don’t have the talent. But, when you’re a kid, if you’re a decent athlete, and I was a decent athlete, I thought maybe I could be a professional baseball player or basketball player.
But you realize soon enough, you don’t have the talent for that. Yeah. So what was
Porschia: your first job?
Richard: Wow, so my first job was Selling men’s underwear at the English town auction, which was a flea market huh, English Town, New Jersey, and I would get up very early on Saturday and Sunday mornings, right?
I would have to [00:04:00] get up around 5 in the morning and be there at 6 and we were outside This was an outdoor indoor outdoor flea market, but we had I say we, my employer had outdoor, had an outdoor stall, if you will, and they would come down from New York with a van full of Hanes and Fruit of the Loom underwear and would sell their underwear at this and it’s basically from a table at this flea market.
And that’s where I worked for them for a few years. So that was my first job and, it was good. I got paid cash and it was good money for a 15, 16 year old. So yeah. But it was cold in the winter and hot in the summer. So it was not really that easy a job.
Porschia: Yeah. Yeah. Very cool. Very cool. I’ve heard a lot of jobs, but I have not heard the first one that’s selling underwear at the.
Yeah, that is a great experience.
Richard: I’ve been [00:05:00] instilled a work ethic in me, and I had a lot of other small jobs, like menial jobs, if you will. But I think even those jobs are important because they do instill a work ethic, a sense that, you know, dealing with customers, getting to work on time, being trustworthy.
And doing a good job. And those skills, if you will, those qualities really take you all through your career.
Porschia: Absolutely. Absolutely. So tell us about some highlights or pivotal moments in your career before you decided to start your own law firm.
Richard: I started out in Miami right out of law school with a small labor employment firm called Muller Mintz.
And so that was a big moment because that was my first job out of law school. And I knew I wanted to do employment law. I had started in that direction while I was in law school. I took some courses in employment law and labor law the distinction [00:06:00] being labor law is, I’ll just diverge for a moment, labor law, I think of as traditional labor law involving unions.
And employers unionized workers employment law is, I think of as issues between individual employees and employers. Okay. So traditionally going back decades, there wasn’t as much employment law because a lot of the statutes that we now litigate cases under didn’t exist. I mean, going back to the way before I started practicing law, let’s say in the 40s, 50s, and 60s, there wasn’t the Civil Rights Act of 1964, that didn’t exist.
The Family Medical Leave Act didn’t exist, the Americans with Disabilities Act didn’t exist. None of these employment laws existed. And to the extent that workers had rights, they tended to exist in the collective bargaining agreements that workers had with their employers. That was [00:07:00] labor law.
And you had that in the private sector and the public sector. As time went on, unions became less and less prevalent, and so traditional labor law became less and less of a viable practice for a lot of lawyers, but taking its place was employment law under all the new statutes that were passed beginning in the 1960s.
And, even continuing through today, there’s legislation that comes up from time to time in the, at the federal level and the state level. So anyway, I started I say that because Mueller Mintz was a labor employment firm. It did some traditional labor law, especially in the public sector, where there, even in Florida today, there still exists.
Some unionized, a lot of unionized workers. School teacher unions and police unions and so forth. But they also were getting involved in employment law as that field was growing. So in [00:08:00] 1991, the Civil Rights Act of 1991 was passed and that really, and that was when I started practicing actually.
Two years later, the Family Medical Leave Act was passed. I was starting at a good time as employment law was taking off as a field, and that was my first job, and I worked there for nine years and then I went to, I got an offer to work with friends at a firm called Baker McKenzie, which is a big national, big international law firm, I worked there for a couple of years, and worked for a couple of other big law firms, including Epstein, Becker Green, which is based in New York, And ended with Ackerman, which is a Florida, mostly a Florida based firm, again, another big firm.
For all those years, for the first 24 years of my career, I was representing management exclusively. I was always on the management side, so we were always defending cases. involving discrimination or family medical leave act issues or fair labor standards act issues. Or we were [00:09:00] enforcing non compete agreements, for example, on behalf of employers against individuals, but it was always on the management side.
And so I did that for the first 24 years. And then I finally decided I was time to, I was a little slow and getting started because 24 years is a long time to, to work at these law firms and then start your own firm. But I finally decided to do it in 2015. And actually I went to work with a partner You know I started with him and he was already doing some plaintiff side work.
And I didn’t know how to do plaintiff side work. I mean I really didn’t know the basics. How to issue a summons I, I didn’t really do that very often. I would let my assistants handle that at the big law firms to the extent we were suing. And usually it wasn’t an issue because usually we were on the defense side.
But that was, that’s just one example. How do you select cases? How do you screen cases? So I worked with my partner for a little over two years. We got along well, but as it turned out, he was looking to make a change [00:10:00] after two years. And my friend at another firm was looking for an employment lawyer.
I recommended my partner to work for him because He was only doing defense work at this firm. So my partner jumped to the defense side, ironically, and that left me to, on my own. And so I’ve been practicing on my own, although I work closely with another attorney in Miami because we handle some significant cases.
So it’s the two of us, the two attorneys. He’s up counsel to my firm. His name is Mark Butler, and I have a full time assistant as well. And and then the other big event that happened, I guess it was COVID. I had a traditional law office up until from 2015 through COVID. And after about six months into COVID, we just, I wasn’t using my law office like a law office.
We weren’t, that is to say, we weren’t doing mediations in the office. We weren’t taking depositions in the office. Clients weren’t coming into the office. [00:11:00] So I just, I was on a month to month lease. I decided, I’m just going to. Give up my traditional law office, set up in my home office here, go completely virtual.
So my assistant works from home, the other attorney, Mark Buehler, works down in Miami, and we’re completely virtual and paperless, but it works beautifully, and it’s actually a lot more efficient than it used to be, so it’s been good.
Porschia: That’s great. That’s great. And I loved hearing about those pivotal moments for you and those changes that you made.
And I also appreciate you giving us those definitions of labor and employment law and also talking about some of those major statutes that came out. Finishing up a master’s degree in industrial and organizational psychology. And you are probably aware of it, but a lot of people have no idea what IO is, but we actually spent a very [00:12:00] significant amount of time.
studying those statutes that you mentioned around, demis discrimination I should say and, fair labor and other statutes to really understand them from the selection side to know and be able to advise companies on, hey, this, what you’re doing isn’t quite right. Go see Richard, right?
Or go see another employment attorney. Because a lot of people don’t necessarily know about those things. So thank you for bringing those up. And I definitely think that the 90s, so many of those statutes were coming out then it was probably a great time, like you mentioned, to really be at the forefront of some of that legislation coming out.
So you’ve got a wealth of experience there. So I want to talk a little bit more about employment agreements. Many of our executive clients and some of our other clients, too, are presented with long and often very detailed employment agreements. So from your experience, can you tell [00:13:00] us, like, the main sections or parts of a standard employment agreement?
Yeah,
Richard: It’s a good question, although I’m not sure I, the word standard employment agreement really is applicable because they’re, in my experience, employment agreements range from very simple really, I was going to say one page documents. Frankly, an employment agreement doesn’t even have to be in writing.
It can be an at will, oral employment contract. Come work for me, and I’ll pay you a salary of 100, 000 a year. Okay? Done. Handshake. You now have an enforceable contract. It can be as simple as that. Now, in that case… You have, at least if you’re in Florida, but in most states, that employee, given that arrangement, is an at will employee, okay?
And the only contractual right he really has, or she has in that case, [00:14:00] is to be paid the salary, the agreed upon salary. For as long as that at will employment contract is in effect. Okay? Now that is, in my view, an enforceable contract. In the sense that if that employee works for a period of time, that employee is entitled to be paid his or her salary, again, as long as that contract is in effect.
But it can be as simple as that. Oftentimes, an employment contract is stated in an offer letter. A one page offer letter that says, you’re going to come to work as, as I don’t know, director of marketing, let’s say. And we’re going to pay you a salary of 150, 000 per year. You’re an at will employee, you’re entitled to these benefits, four weeks of vacation, eligible for the health plan, eligible for the 401k, your hours of work are 8 to 5 Monday through Friday, and sign here if you accept these terms.
Now that’s a very simple employment contract[00:15:00] but it’s also enforceable in the sense that as long as that contract is in effect. The employee is entitled to be paid at a salary of 150, 000 per year and is entitled to the benefits set forth in that contract. But it’s an at will employment arrangement, which means that the employer retains the right to modify those terms on a going forward or prospective basis.
And so if times are tough and the employer says going forward, we’re going to reduce your salary to 75, 000. The employer is entitled to do that. And the employee can either accept the new arrangement or move on. But that’s the nature of an at will employment contract. So that’s at one end of the spectrum.
And then at the other end of the spectrum, I would say You have what I call a, an executive employment contract with the bells and whistles that are normally associated with that. I think that’s what you were probably. Really asking about but before I get into the bells and [00:16:00] whistles, I would just say this.
Most employees don’t get an executive employment contract, right? The vast majority of employees get something much simpler, either a one page offer letter or an oral contract of employment. Or just something very basic that doesn’t really provide much contractual protection other than the guarantee of that salary or that hourly wage for as long as that at will employment.
Now, if you’re fortunate enough to have the leverage in the marketplace to demand and get an executive employment contract, that’s great. And I represent many executives who are fortunate. Typically, those are high level, director level people, C suite people, or physicians, or high level executives at big companies in different positions.
And [00:17:00] they often do have the leverage to demand an executive employment contract. So if they do, and that’s great. Here’s some of the things that I’m looking for, okay? First of all, typically they’ll be for a period of time. So as opposed to an at will employment arrangement, the executive is guaranteed some period of employment so that he can’t, I’m going to use the he or she interchangeably.
That employee can’t get fired, within the first month without some ramifications to the employer. Okay. Typically, we’re looking at a period of time of, let’s say, one to three years. During that period of time, the employer will always retain the right to terminate the employee for cause.
Okay. And. If that happens, if the employer has cause to terminate, that means that the employee is out of luck. The employee can be terminated typically [00:18:00] immediately without any effect. Other than the employee loses his job. But if that’s the case, and if I’m representing the employee the executive in this case, I want the cause definition to be defined very narrowly, okay, or as narrowly as possible.
So what do I mean by that? I pulled up a sample agreement, and this was for a contra an executive I represented. He was CEO of a fairly large company down here, and he got a very nice employment agreement. He had the, again, the leverage to, to demand such an agreement. Cause was defined as, one, an act of fraud or dishonesty by you, which results in the personal enrichment of you or another person or entity at the expense of the company.
Two, your admission, confession, pleading of guilty or nolo contendere to a conviction of any felony other vehicular infractions.
Or any other crime or offense involving [00:19:00] misuse or misappropriation of money or other property. Or three, your continued material breach of the company’s code of conduct or any obligations under this agreement 30 days after the company has given you notice thereof in reasonable detail if such breach has not been cured by you.
So in that case, the executive gets a cure period. If he is alleged to have breached the code of conduct or for your gross negligence or willful misconduct with respect to your duties or gross misfeasance of office. Now, I view that as a pretty good, from the executive’s point of view, pretty good, narrow definition of cause.
In other words, he’s got to do something really bad to invoke the cause definition, right? And if he doesn’t do something really bad, then if the company wants to terminate him, the company will not have cause. It’ll be a without cause termination. So what happens in the event of a without cause termination?
Typically in these executive [00:20:00] employment agreements, The executive gets severance pay. Now, that can take a few different forms. That can be either the executive gets paid out for the remainder of the term. That’s one possibility. Another possibility is there’s a defined amount of pay that the executive gets.
I see that more often. Typically, it’s six months or a year of severance pay. And so the executive has protection from being terminated without cause. Now the other thing I want to see in such an employment agreement. Is what’s called a good reason provision and a good reason provision is the flip side if you will of a without cause Termination provision.
So what do I mean by that? If you’re the executive in this situation, you don’t want to give the Employer an incentive to treat you badly to force you to resign because in these [00:21:00] Executive agreements you don’t get severance pay If you’re terminated for cause or if you resign, it makes sense if the employee if the executive just walks off the job and says, okay, fellas, see you later.
He doesn’t get severance pay. Okay. Typically, but if you have a good reason provision, the executive may have a right to terminate the. Employment agreement for good reason, which I’ll describe, and treat the termination for good reason as a termination by the employer without cause. In other words, they would have the same effect.
So when would a good reason provision kick in? Suppose the employer reduces the employee’s pay or benefits. Okay, that would be good reason for the executive to terminate. Or, suppose the, and this is a more common example, suppose the company [00:22:00] substantially reduces the executive’s responsibilities or authorities at the company, okay?
Let’s say one day the executive is supervising a team of 50 employees, and the next day the executive is supervising a team of three employees. Okay. And he’s been effectively walled off from the important decisions that the company is making well in that case, if you have a good reason provision in the contract, the executive can invoke the good reason termination and treat that as a termination without cause and still get the severance pay.
And the third good reason that I typically see in these contracts. Is a required relocation of the employee more than 25 miles or 30 miles or 50 miles. It depends on, the contract. But, for example, if you have an executive who’s working, [00:23:00] let’s say, here in Fort Lauderdale, where I am.
And all and one day the company says we’re relocating to Boston, Massachusetts. Okay, under a good reason provision, the executive would typically have the right to say, okay, fellas, I appreciate your offer to move me to Boston. Where the company is going, but I have kids, my wife is working here I just can’t, I can’t relocate, so I’m going to invoke my good reason termination and treat that again as a termination without cause and get the severance pay that I’m entitled to under there.
So I like to see both a narrow definition of cause and a good reason. Clause in these executive contracts and the good one, the good contracts I see have these provisions. .
Porschia: Wow. This is a lot of great information and I know this episode will be a great resource for [00:24:00] we’ve had a lot of executive clients who, have asked us, for, questions like this that are legal questions.
And, I think this could give someone some good insight to know when they need to reach out to an attorney like you another clause that sometimes I’ve had a lot of our clients talk to us about and just bring up and feel strongly about in some way or another is a non compete clause.
So how would you describe like a non compete clause to someone who might not be familiar with it? Sure.
Richard: Yeah, it’s a great segue to what I was going to the next element of these contracts, which is this up to this point, I’ve been describing provisions in an executive contract that protect the employee.
Okay, it’s great to have protection from termination and to be able to get severance pay if you’re [00:25:00] terminated without cause or you terminate for good reason. But there are typically provisions in these executive employment contracts that also protect the employer. And one of those is a non compete or non competition clause.
So that typically will say. That during the executive’s employment and for a period of one or two years after the employment ends, regardless of the reason, the executive can’t compete with the employer, can’t go to work for a competitive company, or can’t start His or her own competitive competence.
Okay. Now, if the executive is getting severance pay of a year, let’s say, in this, let’s say, I’m reviewing the executive contract and I see that it provides for severance pay in the event of a [00:26:00] termination without cause or a resignation for good reason, the executive is entitled to one year of severance pay.
I typically don’t have a problem with a one year non compete. Thank you. After all, why would the company want to pay you only to have you compete with them during that one year period, right? But not all contracts have that feature. Sometimes the contract will say the executive gets three months of severance pay in the event of a termination without cause.
But the executive can’t compete for two years. Okay, so now we have a mismatch in my view. And if I’m representing the executive… I’m going to say, look, this could be a problem because, okay, best case scenario, if you’re terminated without cause, you get three months of pay. And then you have, one year and nine months left after those [00:27:00] three months run out in which you’re required by this contract.
Not to compete with the employer. Now, that can be a problem, depending on the employee, and depending on the state. And so there are a bunch of factors that go into this. So what do I mean? First of all, there are some states that absolutely prohibit non competes like that. So California is one of them, for example.
But typically employers are smart enough not to have an executive contract governed by California law. Okay, but if you’re in California, you’re probably in good shape in that regard. But let’s say you’re in one of the many states that allow non competing like Florida. Then I’ll have a heart to heart discussion with my client.
I said, look, this is a potential problem because, and I’ll ask them, can you Afford not to work for the in this [00:28:00] industry for a competitor for two years after your employment ends If you’re only going to get three months or six months or even a year of severance pay and sometimes the answer is it’s not a problem because The client might say i’m a bean counter.
I’m an accountant. I can go to work for I don’t need to be in this Industry, I can go to work in another industry. That’s not a problem. There are other clients. I have who have told me That’s a major problem. I’m in the mortgage business. I had, this is an actual case. I had a client came to me. He was offered a position at a startup company, but it had one of these non compete agreements and it didn’t provide for severance pay.
He was going to be an at will employee of the company with a one, I think it was a one year non compete. And I said to him, can you afford not to work in the mortgage industry for a year? And he said, that’s [00:29:00] all I know how to do. I’ve been doing this for 15 years. I said they have a lot more money than you do, and the agreement is probably enforceable under Florida law, as long as you’re there for a significant period of time, and you’ve learned enough about their clients and their confidential business information that they could justify it.
Enforcing a non-compete. Okay, so I, so my conversation was, I think this is a risky move for you because although it was an attractive offer with a startup company, there was a potential big downside, which is that he was gonna be frozen out of the industry for a year if. If he left for any reason,
Porschia: [00:30:00] question, Richard, have you ever been able to negotiate that?
So to get the company to say either one, they would extend the severance or reduce the amount of years on the non compete to close that gap that you,
Richard: that’s what either I or my clients will do. And typically, oftentimes it’s my client who will. He’s or she is the one with the relationship with the employer and maybe has in a better position to do that But I’m advising the client and look this is a potential problem and the client will say I agree with you I need to go back and try to even this out Yes and try to and oftentimes my clients will say look if you’re [00:31:00] going to hold me to a non compete You gotta pay me.
I can’t, I have a family to feed, I have a mortgage to pay, I have bills, I can’t be, I can’t afford to be out of the industry for a year if you terminate me for cause, that’s one thing, if you terminate me without cause six months into my employment, I can’t be held to a one year non compete unless you pay me for that time.
Now, there are some states laws I should mention here that will require the employer to pay the employee. Some portion of the wages. I think there’s a Massachusetts law that requires a fairly new Massachusetts law. So you want to look at state law and see what the state law requires, but in a lot of states, that’s not required as a matter of law, and so it is a matter of negotiation between the employer and the employee.
The one thing that really I’m both amused and sometimes frustrated by is when clients come to me and say, I’ve, I have read that these non compete agreements aren’t [00:32:00] enforceable or I was talking, I was playing golf with this guy on the weekend and he told me that not to worry about it.
They’re not enforceable. And I, my response is usually that’s probably not good advice, at least not in Florida. And as a general matter these agreements can be, and often are enforced. And one basic problem is that the companies typically have a lot more money than the employees. And so even if there was a defect in the non compete agreement that maybe made it unenforceable, you’re not going to get a ruling from the court until you spend a lot of money on that.
And so it’s not as easy as just saying it’s not enforceable and don’t worry about it. Unless it says California law. I had that situation once. Where a client came to me and he had to not compete, and for some reason the employer said California law applies, and I actually did tell him, don’t worry about it, he [00:33:00] went out and competed, we got a cease and desist letter a few months later from the former employer, and we fired a letter back saying your contract is governed by California law, you should know that California law prohibits And that was the end of that.
But that’s the unusual case. In most cases the employer will have some justification for enforcing a non compete. Again, it require, usually requires that the employer that the employee have access to confidential business information, trade secrets. Or exposure to the company’s clients, but that’s usually not that high a bar for the for most employers to meet against an executive type employee.
Now, I like to use the example of, the French fry maker at McDonald’s. You’re not going to be able to hold that employee typically to a non compete. Okay, that’s an extreme example on the other [00:34:00] end. Because. I don’t think there’s any trade secret involved in making French fries at McDonald’s or confidential business information involved in that job.
And you don’t, as a, as the guy making French fries, you don’t develop relationships with customers, right? Nobody goes to McDonald’s. Because of the guy making the french fries, so it’s such that if he went to Burger King across the street, he would bring customers with him, right? That doesn’t happen. And you can’t enforce a non compete against an employee like that, or anybody remotely like that.
But, when we’re talking about highly paid executives, typically there is going to be some legitimate business reason for the employer to go to court and say, we have a legitimate reason for enforcing this non compete, your honor. This employee was exposed to all our confidential business information, our pricing strategies, our marketing strategies, our clients contact information.
Our clients preferences, he has all that information, and for all these [00:35:00] reasons, we need to enforce this non compete that this executive agreed to. And that’s a compelling argument, and at least in Florida, that will often carry the day. Got it,
Porschia: got it. Thank you. That, , I learned so much and took so many notes there, Richard.
I’m sure other people were, too. I want to know, are there any red flags, that people should be aware of when reviewing an employment agreement, right? Something so alarming where they say, if they’re in Florida, hey, I need to call Richard, or if they’re in another state, they know they need to call an employment law attorney.
Richard: Yeah, so I think we’ve really touched upon the main, from my perspective, the main red flag Is the is a contract that doesn’t provide protection to the employee on the one hand, and on the other hand, employ imposes significant post-employment restrictions on the employee’s activity. So if you have that kind of [00:36:00] agreement, you’re taking a big risk, and I do see this, and it’s not very uncommon, actually, because it’s not uncommon for employees to be at will employees on the one hand, and not to get an employment agreement really at all, other than a non compete, which we’ll get to.
Let’s just say the employee gets a one page offer letter. You’re an at will employee. Here’s your pay. Here are your benefits. Here are your hours. Here is your location of work. Sign here. Okay? Simple offer letter. And then, the employer wants to have the, wants the employee to sign a confidentiality and non competition agreement.
Now, in Florida, that’s perfect, and in most states, that is perfectly legal, an offer letter on the one hand, and a stand alone, non compete agreement on the other. That, to me, is a significant red flag, because [00:37:00] now, it may be a nice offer, but keep in mind, what happens if you leave this company? What is your position going to be?
Are you going to be subject to a non compete and can you afford to be barred from competing? And even if it’s not a non compete, we haven’t talked about non solicitation agreements, but they’re very similar. A non solicitation agreement might be, might fall short of saying you can’t compete in the industry, but it might say you can’t solicit.
Any of the customers that you dealt with or any of our customers for that matter depends how it’s worded For one or two years after your employment ends now again, these are highly fact specific situations My question to my client in that situation is that going to be a problem, given the nature of your business and every, businesses differ so, so widely that it’s hard to say whether that’s going to be a problem in a particular case.
But let’s say, let’s take [00:38:00] an industry, for example, where there are only a limited number of customers. Okay. So let’s say, for example you’re in the business of selling. Automotive parts to automotive dealerships. Okay. Now, how many automotive dealerships are, exist in South Florida? I mean, they’re only like what, 10 or so automakers, and so many of the dealerships are owned by the same company, you have auto nation.
. So let’s say you’re in that business and my conversation might go something like this. How many customers are there out there that, and he’s like, I sell to all of them. The answer might be, I sell to all of these customers. We sell parts to all the automotive dealerships in South Florida.
There aren’t that many. Like there are, lots of different dealerships, but they may be owned by the same,[00:39:00] five or six companies. So if he can’t go and work for a competitor that sells to those same customers, right? He’s out of work. Even if he, that is to say, even if he could, in theory, go to work for the competitor, if he can’t solicit those same customers, he’s effectively barred from working for a competitor, right?
It may not be a non compete agreement in name, but in effect, it’s a non compete agreement. And then there are other businesses where there may be thousands of potential customers. Maybe every homeowner in South Florida is a potential customer. And if you’re only barred from… Let’s say I, I represent a public adjuster, these are the people who negotiate claims, insurance claims.
Every homeowner in South Florida is a potential customer. So if in that case, if the public adjuster were barred only from soliciting the customers of her former employer, but she can work for another public adjusting agency, [00:40:00] that wouldn’t be necessarily a problem, right? So it really is a fact specific situation.
And that’s why I like to take a deep dive into what the employer and the employee do and try to decide, is this restrictive covenant going to be a problem? But that’s a big red flag. Okay. Big red flag. The other problem with these restrictive covenants is. Is that if the employee with the restrictive covenant goes to a prospective employer, they don’t want to hire somebody under a restrictive covenant because they can get sued, the new employer can get sued.
So it really restricts the mobility of employees and I think you have to be very careful about that. I’ll just add a couple of points here. The FTC, the Federal Trade Commission, has proposed banning non competes in the workplace. There’s a proposed rule that’s circulating right now. It [00:41:00] hasn’t gone into effect yet, and if it does go into effect, I expect there will be legal challenges.
But that could really alter the landscape here in a significant way. And then there are some states that have Independent of the federal action that have taken action against non competes. So just Last week minnesota passed a law banning non competes Wow, so you really need to look at state law and see what the law is in your jurisdiction and what law governs The agreement because you could have a, you could have an employee in Georgia subject to a Florida non compete agreement.
There’s nothing per se illegal about that. So it becomes a complicated issue at times, but you really need to look at what law applies.
Porschia: Got it. Got it. Wow. That was a lot of great information, Richard. So tell us more about your firm. Richard D. Tushman PA. So I
Richard: represent both [00:42:00] employers and employees in different matters.
And and we do both counseling and litigation. So that is to say, I represent, I still represent a lot of employers and have throughout my career. Counseling them on how to comply with the Fair Labor Standards Act, counseling them on how to handle a, an employee termination, where there could be a potential legal claim or there is a legal claim asserted, right?
So just this week, as an example, I, on behalf of a law firm client that I represent a fairly large personal injury firm. They were, they received a demand letter because they fired one of their employees and I had to respond to the demand letter. So that’s a typical thing that I do on behalf of employers.
When employers get sued, we represent them. And again, we, I have a. The two member attorney team plus an assistant, so we were able to get out a lot of work. [00:43:00] One of the big cases I have right now is against the U. S. Department of Labor wage and hour division. They’re suing one of our clients for overtime violations.
I just settled another collective action on behalf of a client. I just won summary judgment in a family medical leave act case on behalf of an employer that was affirmed by the 11th Circuit Court of Appeals. So I do, I still do a lot of defense work and that includes litigation in courts and state courts, federal courts, and in arbitration.
And then on the employee side, I represent a lot of executives, doctors typically high, relatively highly paid individuals, but not always. On employment matters against employers. And the nice thing about being in a small firm is I don’t have conflicts of interest typically. I obviously, I would never represent an employee against a client of mine, of course.
Or even a client that I represented recently that may [00:44:00] no longer be using me. That would present a conflict, but I typically don’t have, , there are so many employers out there and so many individuals, typically that it’s not a, there’s no conflict situation. So I end up representing a lot of executives and doctors and employees in negotiating employment agreements litigating breach of contract cases, defending against non compete enforcement.
I have a Family Medical Leave Act claim in federal court on behalf of an employee right now against the big multinational technology. That I believe violated the Family Medical Leave Act, so we’re litigating that in federal court now. And I like I think I’ve gotten very good results over the years I have many reported decisions in my name, and We try to do a good ethical job for our clients.
Great.
Porschia: Great. We’ll be providing a link to your website and other social channels in our show notes so that people can find you online. [00:45:00] What is, yeah, what is the best way for someone to get in touch with you?
Richard: So they go to my website, Richard D. Tushman, PA, and shoot me an email. That’s probably the best way.
My phone number is listed as well. Not hard to find me. You could also go to the Florida bar, of course, and look me up and just shoot me an email. But I’m, I check my email religiously, 18 times a day and on the weekends and in the evenings. So it’s usually, I’m pretty responsive and can get back to clients.
I will often have my assistant get back to prospective clients to get a sense of what the issue is before I, I call the prospective client because it allows me to narrow the questions And she screens the calls and that, that system works pretty well. So sometimes I’ll get an email, I’ll forward it to my assistant, I’ll say, please call this potential client.
She’ll send me an email back with the details and then we’ll set up a call. And I do a free consultation, but that means like usually 10 or 15 minutes, which is usually [00:46:00] an adequate amount of time to assess whether there’s a case. And whether there’s something that I can help the client with. It’s not unusual for me to have a 10 or 15 minute conversation with the client at no charge.
And for me to tell the client, I can’t really help you. And this is what I advise you do, but there’s no reason for you to retain me. This happened just this afternoon, for example. A client or potential client was referred to me by another client. And she was being laid off from her job. She was being offered severance pay.
We explored the circumstances of the layoff. There was nothing illegal about the layoff. They didn’t have any contractual obligation to offer her severance pay. They were offering her three months and she wanted to get more money and I don’t blame her. But I said, there’s, based on what you’ve described, the company has done nothing illegal.
We don’t have any legal leverage here [00:47:00] to demand more money. If you can get more money by convincing them that you just deserve more based on your. You’re, your accomplishments and your contributions to the company over the years. Great. Go for it. I encourage you to do it there. If you do it in a respectful way, the worst that can happen is they say no.
But I did tell her I can’t really help you with that. , unless there’s a legal claim. For me to assert on your behalf, I’m really just a guy with a computer and a telephone. In other words, I’m really not exercising my, my, my power, if you will, or my my, my skills as an attorney in that situation.
Now, if she had told me that she was fired because she complained of being sexually harassed at work, okay, then we have something to work with. But that wasn’t the case, and, I’m not gonna have anybody manufacture a claim. So that was a 10 or 15 minute conversation. She thanked me for my time.
She just sent, right before [00:48:00] this podcast, she sent me an email thanking me again for my time. And that’s probably where it will end. And that’s not uncommon. I have those conversations with potential clients every day. So it’s kind of part of my job that I don’t get paid for, but it leads to further business.
Porschia: It’s great that you are open to speaking with people daring, what could be a very, unsettling, uncertain, or stressful time in their lives. So that’s great, Richard. Last question for you. How do you think executives or professionals can get a positive edge in their career?
Richard: I think having counseled many executives.
Director level employees, doctors, I guess, I think my advice would be try not to take things personally, I think where relationships go south, what I’ve [00:49:00] seen time and time again is where people get offended because Of a business decision the company has made, and it’s easy to be offended, we all have egos and we all have certain expectations and we all think we’re great and we do, I think I’m great, right?
We all think we’re terrific, but what I’ve seen over the years is when executives can put the emotions aside and not be offended and go with the flow and understand That in most cases, the decisions are being made
at, in the interests of the company and its shareholders. The executive can last and stay at the company and thrive at the company ultimately. But once the, [00:50:00] the employer has a hissy fit, so to speak, okay, and I see this, I’ll give you,
This happened just this past week. I am representing
an executive board member. He was actually the founder of this tech startup. And over the years, he’s been moved aside in favor of more of a professional executive level team. And just recently, he attended a board meeting. And express some personal resentment and kind of offended some of the marketing team.
Okay. Obviously I can’t name names here, but it elicited a very angry response from the CEO of the company and his days at this company are numbered. Now, if he had conferred with me prior to this, I would have told him, hold your powder. Keep your powder dry, as they say. Write [00:51:00] this email, have this catharsis, if you will, and don’t send it.
Send it to me, okay? Sleep on it. Do not send that email. Write it up. And, I’ve been, and I guess This goes, the second piece of advice goes along with the first, don’t burn bridges, right? It’s the same concept, because even if you’re leaving the company, if you leave in a huff and you burn bridges, that I think will have a negative impact on your career.
But at least in my experience, dealing with many executives and in my own personal experience, it’s really been better. to not burn bridges, because those relationships you formed, even if they end on a sour note, can come back and help you later on. I’ve gotten so many referrals from previous law firms.
I mentioned at the outset, I’ve worked for a few different law firms, quite a few, four, five, or six different [00:52:00] law firms over my career. And I’ve gotten referrals from every one of them since I’ve been out on my own. Because I try not to burn bridges, and I and try not to take things personally.
It’s hard to do because sometimes you’re at a place of employment. Things don’t go the way you thought they were going to go. Maybe you think that, certain promises were made to you that weren’t kept, but usually it’s not personal. It’s usually just business, and I think if you treat it that way, you’ll be better off in the long run.
Porschia: Yeah. Richard, you’ve shared a lot of wisdom with us today, and I’m sure that our listeners can use it to be more confident when they are reviewing their employment agreements. We appreciate you being with us.
Richard: Portia, it’s been a pleasure, and I look forward to, working with you again in the future.
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