{"id":202,"date":"2019-06-18T15:15:46","date_gmt":"2019-06-18T15:15:46","guid":{"rendered":"https:\/\/www.sherin.com\/employment-blog\/?p=200"},"modified":"2019-10-01T19:53:03","modified_gmt":"2019-10-01T19:53:03","slug":"the-embattled-executive-strategies-for-protecting-compensation-and-careers","status":"publish","type":"post","link":"https:\/\/www.sherin.com\/employment-blog\/2019\/06\/18\/the-embattled-executive-strategies-for-protecting-compensation-and-careers\/","title":{"rendered":"The Embattled Executive: Strategies for Protecting Compensation and Careers"},"content":{"rendered":"

In the not so distant past, it was not uncommon for successful executives and professionals to spend decades, if not their entire career, with one organization.\u00a0 Increasingly, however, that is not the case.\u00a0 These days, many executives, at one point or another, see their career, compensation, and reputation jeopardized amid allegations of wrongdoing \u2013 whether based upon individual performance, overall business performance, or allegations of misconduct.<\/p>\n

While ideally the best strategy for protecting one\u2019s career is to demonstrate consistently strong performance, maintain positive and productive relationships, and avoid any appearance of impropriety, even the most high-performing, well-respected and responsible executives may find themselves embattled, suddenly on the opposite side of the organization to which they have dedicated their professional lives.\u00a0 In those circumstances, developing a strategic plan to navigate the next steps is critical for preserving one\u2019s career, compensation and reputation.\u00a0 While the first reaction may be to go to \u201cwar,\u201d especially if one has been misjudged or unfairly treated, the wiser strategies \u2013 often, for all concerned – are usually more nuanced.\u00a0 One does not often read in the press about a legal strategy where an executive, accused of wrongdoing, emerges quietly with compensation meaningfully preserved and an unhindered career path.\u00a0 This is precisely the point. If that is your goal, consider the strategies set forth below.<\/p>\n

Exercise Restraint & Retain Counsel<\/strong><\/h3>\n

Upon learning of allegations of misconduct, an accused executive is often inclined to take immediate and extreme positions, whether in the form of a \u201cdefense\u201d or going on the \u201cattack.\u201d Rather than prematurely responding to the allegations, the executive is well-served by initially taking an \u201cears open, mouth shut\u201d approach.\u00a0 By collecting as much information as possible, the executive will be better prepared to respond to the allegations.<\/p>\n

Likewise, an accused executive should resist the temptation to become angry or commence his or her own investigation, such as by approaching colleagues who may have reported concerns.\u00a0 This course of action will reflect negatively on the executive, potentially raising concerns about his or her temperament, judgment and, possibly, retaliation against \u201cwhistleblowing\u201d colleagues.\u00a0 At this juncture, it is best to exercise restraint and retain legal counsel to assist through the internal review or investigation process.<\/p>\n

Participation in the Internal Review\/Investigation<\/strong><\/h3>\n

Depending on the nature of the concerns, the executive may be asked to cooperate in an internal review or investigation.\u00a0 Particularly if the concerns have legal implications, the employer may involve the executive\u2019s legal counsel, such as by sharing information, allowing the executive to respond in writing to specific questions, or allowing the executive\u2019s counsel to be present during an in-person interview.\u00a0 Sometimes, however, the executive may be asked to sit alone for an interview, in which case, he or she should speak with counsel to determine the best course of action for responding to such a request.<\/p>\n

Review and Exercise Employment Rights<\/strong><\/h3>\n

If accused of wrongdoing, many executives have rights pursuant to employment contracts and\/or employer policies or practices.\u00a0 For example, the executive may be entitled to an opportunity to respond, or to attempt to rectify the situation.\u00a0 Likewise, executives may have compensation protections \u2013 especially in the case of termination \u2013 such as notice pay, severance pay, and rights to equity\/deferred compensation.\u00a0 In a recent decision, the Massachusetts Supreme Judicial Court held that an executive, who was terminated for cause for having a relationship with a subordinate, should have been given the opportunity to remedy the situation, and was permitted to keep his equity compensation because his conduct did not necessarily harm the company. [1]<\/a>\u00a0 Accordingly, reviewing all relevant documents with counsel is critical to preserving the executive\u2019s rights and\/or compensation.<\/p>\n

Engage in Compensation\/Career Preserving Negotiations<\/strong><\/h3>\n

In many instances, the employer is willing to negotiate career\/compensation preserving arrangements so as to avoid protracted, possibly public, and likely unnecessary disputes.\u00a0 An executive\u2019s leverage points for such negotiations include, without limitation, the \u201coptics\u201d of the situation, the manner in which the employer handled similar allegations in the past, and equitable considerations, such as the executive\u2019s lengthy, successful tenure with the company.<\/p>\n

The executive may also, of course, have legal claims that can serve as leverage.\u00a0 For example, if the employer selectively enforced a policy so as to rob the executive of the fruits of his or her contract, he or she may have a contract-based claim for breach of the covenant of good faith and fair dealing. [2]<\/a>\u00a0 Likewise, if the employer treated similarly-situated individuals differently (such as by imposing a lesser-degree of discipline), an executive may have a discrimination claim. [3]<\/a>\u00a0 Even the manner in which the executive is treated may provide the basis for a legal claim.\u00a0 For example, an employer who dramatically and publicly escorts the executive from the building, without any written or public communications, may face exposure for defamation. [4]<\/a>\u00a0 All forms of potential leverage should be discussed with counsel so as to best position the executive for negotiations.<\/p>\n

Key \u201cTake-Aways\u201d for the Embattled Executive<\/strong><\/h3>\n

Learning one has been accused of wrongdoing is an upsetting and worrisome situation in anyone\u2019s career, but the executive should strive to stay calm, gather as much information as possible, and consult with legal counsel.\u00a0 Strategies for moving forward will vary by case, and the pros and cons of each should be thoroughly vetted as soon as possible.\u00a0 By approaching the situation with a carefully considered strategic plan, the executive will be in the best position to preserve his or her career, compensation, and reputation.<\/p>\n

[1]<\/a> See Balles v. Babcock Power, Inc., 476 Mass. 565, 577-79 (2017).<\/em><\/p>\n

[2]<\/a> See Williams v. B & K Medical Systems, Inc., 49 Mass. App. Ct. 563 (2000) (applying the covenant of good faith and fair dealing to challenge the selective enforcement of an expense policy used to deny severance benefits to departing employee).\u00a0<\/em><\/p>\n

[3]<\/a> See Trustees of Health and Hospitals of the City of Boston, Inc. v. Massachusetts Com’n Against Discrimination, 65 Mass. App. Ct. 329, 336 (2005) (disparate application of policies and procedures actionable under discrimination laws)<\/em><\/p>\n

[4]<\/a> See Phelan v. May Department Stores, 44 Mass. 52, 56 (2004) (finding physical actions, such as escorting accused about in front of colleagues, without written or spoken communications, may give rise to defamation claim).<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

In the not so distant past, it was not uncommon for successful executives and professionals to spend decades, if not their entire career, with one organization.\u00a0 Increasingly, however, that is not the case.\u00a0 These days, many executives, at one point or another, see their career, compensation, and reputation jeopardized amid allegations of wrongdoing \u2013 whether […]<\/p>\n","protected":false},"author":9,"featured_media":203,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[],"tags":[],"class_list":["post-202","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"acf":[],"yoast_head":"\nThe Embattled Executive: Strategies for Protecting Compensation and Careers - Employment<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.sherin.com\/employment-blog\/2019\/06\/18\/the-embattled-executive-strategies-for-protecting-compensation-and-careers\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Embattled Executive: Strategies for Protecting Compensation and Careers - 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