{"componentChunkName":"component---src-templates-blog-post-ts","path":"/going-from-an-owner-to-an-employee-in-the-sale-of-a-business/","result":{"data":{"site":{"siteMetadata":{"title":"Clausehound Blog","author":"Joshua Koudys"}},"markdownRemark":{"id":"4acd96e1-0f64-5497-a329-bd88234fe699","excerpt":"In the sale of a business, sometimes the previous owners (the “ex-owner”) are asked by the purchasers to stay with the company for a fixed time period to help…","html":"<p>In the sale of a business, sometimes the previous owners (the “ex-owner”) are asked by the purchasers to stay with the company for a fixed time period to help transition existing clients or customers to the new ownership. In this case, such ex-owners are usually required to enter into an <strong>Executive Employment Agreement</strong> with the new company. </p>\n<p>However, problems may arise when the purchase price for the business is directly tied to the retention of the company’s customer/clients (also referred to as an <strong>earnout</strong>). This is because if the ex-owner’s Employment Agreement with the company is terminated, the retention of the customers/clients may also drop, which in turn would negatively affect the purchase price. For this reason, it is very important for ex-owners in a similar situation to negotiate strict termination clauses into their Executive Employment Agreement.</p>\n<p>As an ex-owner, is your employment secure?</p>\n<p><a href=\"http://www.travelweekly.com/Mark-Pestronk/When-going-from-owner-to-employee-ensure-your-job-is-secure/\" target=\"_blank\" rel=\"nofollow noopener\">Read the full article here.</a> </p>\n<p><strong>Take away:</strong></p>\n<ul>\n<li>Ex-owners should consider requesting a clause which states that their Executive Employment Agreement may not be terminated by the company unless the ex-owner materially breaches the Executive Employment Agreement.</li>\n</ul>","frontmatter":{"title":"Going From an Owner to an Employee in the Sale of a Business","date":"September 22, 2015","description":"This article discusses the importance of negotiating strict termination clauses in an Executive Employment Agreement when an Owner becomes an Employee.","author":{"id":"rajah@cobaltcounsel.com","first":"Rajah","last":"Lehal","bio":"Rajah Lehal is Founder and CEO of Clausehound.com.  Rajah is a legal technologist and technology lawyer who is, together with the Clausehound team, capturing and sharing lawyer expertise, building deal negotiation libraries, teaching negotiation in classrooms, and automating negotiation with software.","image":{"childImageSharp":{"fluid":{"base64":"data:image/jpeg;base64,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","aspectRatio":1,"src":"/static/d7bbad08c257f3987a4a5710553e9e17/bdd4d/Rajah.jpg","srcSet":"/static/d7bbad08c257f3987a4a5710553e9e17/2b9ee/Rajah.jpg 80w,\n/static/d7bbad08c257f3987a4a5710553e9e17/e5d64/Rajah.jpg 160w,\n/static/d7bbad08c257f3987a4a5710553e9e17/bdd4d/Rajah.jpg 320w,\n/static/d7bbad08c257f3987a4a5710553e9e17/6e63d/Rajah.jpg 400w","sizes":"(max-width: 320px) 100vw, 320px"}}}},"tags":["Termination","Employment Agreement","Human Resources","Rajah"]}}},"pageContext":{"slug":"/going-from-an-owner-to-an-employee-in-the-sale-of-a-business/","previous":{"fields":{"slug":"/probationary-periods-in-employment-agreements/"},"frontmatter":{"title":"Probationary Periods in Employment Agreements","tags":["Employment Agreement","Probationary Period","Human Resources","info@clausehound.com"],"author":{"id":"info@clausehound.com","first":"","last":null}}},"next":{"fields":{"slug":"/employment-agreements-cannot-be-changed-unilaterally/"},"frontmatter":{"title":"Employment Agreements Cannot Be Changed Unilaterally","tags":["Employment Agreement","Amendment","Human Resources","Rajah"],"author":{"id":"rajah@cobaltcounsel.com","first":"Rajah","last":"Lehal"}}}}}}