In addition, compensation allows a company to build trust between its officers and directors by showing a high degree of commitment and support to its executives. It is often in the best interests of the company for management to have competent legal advisors. Transportation compensation rules may allow the employer to retain some control over the selection of advisors, hourly rates and expenses. Companies that award damages may attempt to reduce liability by including a clause to limit the types of expenses for which compensation is available or by adding a monetary cap on the total amount that the entity has required to pay. As a result, the terms of the compensation provisions are often the subject of in-depth negotiations. Answer #1: I accept that my first impression, without the bottom of knowing why the affiliate company is trying to be compensated by a great contagion of the employer, and even sanctions. Employees make mistakes on a regular basis and many cost the employer money. This is generally considered the cost of the activity. Perhaps you could suggest that the employer limit compensation to gross or deliberate negligence on the basis that: 1) does not tend to be industry-wide; 2) this type of worker`s compensation to the employer could be challenged in court as a constraint on the part of the employer if your client ever tries to enforce it; 3) Your employer will have a competitive disadvantage when it comes to hiring the best and brightest who, for some pretty obvious reasons, are hesitant to join an employer who is trying to shift the weight of mistakes to its employees. I think what your client is trying to address is the real reason for the existence of the Errors – Omissions directives.1 The Supreme Court has considered these political concerns at London Drugs v.
Kohne-Nagel (SCC). These cases followed a different path than the famous decision of the British House of Lords in Lister v. Romford Ice – Storage , which decided that workers should always be held liable for the damage they cause to the employer. Decisions on executive compensation require factual, legal, economic and strategic analysis. Please contact Clouse Brown PLLC for any issues arising from the compensation clauses in the employment contracts. Our lawyers are available to executives who need help negotiating compensation settlements. We also advise employers and business leaders to minimize the risks associated with compensation rules and to develop employment contracts for executives. One of the ways in which a compensation plan can offer protection is to oppose the claims of an officer`s former employer. For example, Ed Executive is leaving Company 1 to join Company 2.
Ed Executive signs an employment contract with Company 2, which contains a compensation clause stipulating that 2 Ed Executive must compensate and defend claims, damages, legal fees and expenses related to Ed Executive`s obligations with Company 2. After Ed Executive began his work for Company 2, Company 1 sued him and claimed that his new job with Company 2 was contrary to various post-restrictive agreements included in his employment contract with Company 1.