A Practitioner’s Guide to Negotiating Good Reason Clauses for Executives

Abstract

Good Reason clauses in executive employment contracts are a flexible tool for a diligent negotiator to utilize for a variety of reasons. By framing the concepts underlying a resignation for Good Reason to the specific needs of an executive, a practitioner can best protect the executive from actions of the employer which would undercut the executive’s ability to succeed. Furthermore, by examining the legal and practical pitfalls of certain aspects of a good reason definition during the negotiating stage, a drafter can avoid issues before they emerge.