ACTUAL CASE HISTORY: Claudia was always near the top of her class, in high school, in college, and in business school. And so it was in her hotel industry career: within eight years of her joining the world's second largest hotel company as a management trainee she rose to its corporate headquarters, as its Senior Vice President of Sourcing. As always before, she was once again "near the top."
From Claudia's perspective, promotions were never a problem. Time and again her hard work and solid reputation for near-total devotion preceded her. She didn't seek promotions; they seemed to seek her. When she was contacted by an executive recruiter about a position as Chief Operating Officer of a direct competitor, Claudia took it in stride. It seemed like one more validation of what her parents had always taught her: hard work will reward itself. After consulting with her husband, she decided to aggressively seek the position.
Claudia's eight interviews over four days went extremely well. She got along especially well with the company's new CEO, for whom she'd be working. She was presented an offer that nearly doubled her present compensation, and the opportunity - for the first time in her life - for considerable financial security. She soon accepted. Human Resources was then assigned the task of preparing her employment contract, and Claudia hired legal counsel to review its terms.
Claudia had never been in this situation before: she'd never left a company since business school. She decided to handle all aspects of the resignation process herself, relying on her considerable common sense and people skills. She composed a wonderful resignation letter, and distributed it to her direct boss and her closest colleagues. In her resignation letter, she explained to her colleagues how much they meant to her, but given her new title and assignment, how strongly this new opportunity beckoned. She offered to do whatever was necessary to make the transition a smooth one. Unfortunately, it was anything but smooth.
The first "dark clouds" appeared the very next morning, when Claudia arrived, with Starbucks cup in hand, and turned on her computer. It was frozen; apparently her password had been changed. Her first call, to the Information Technology Dept., was referred to Human Resources. She was asked to come to HR for a brief meeting. When Claudia arrived, she saw four people in the conference room: the HR Director, her boss, his boss, and the company's General Counsel. The conversation was brief, led by the company's HR Director.
Claudia was advised that her departure was not viewed in a positive manner, especially her going to a direct competitor. There was concern that Claudia would use her knowledge of the company's sourcing strategies and methods - especially its new plans to build their own factories in Asia - for her new employer's benefit, maybe even suggest they do the same. That exact scenario was suggested by some of what Claudia mentioned in her resignation letter. She was also asked if the days she'd taken days off as sick days during the past few weeks which were, in fact, used for interviewing; in fact, they had.
The clouds only grew "darker" when Claudia spoke to her attorneys. Their review of the proposed contract offered by her new employer indicated several significant problems, some extremely problematic. The position wasn't all she'd been led to believe. The requirement that she spend almost half of her time in Asia was a complete surprise. The one-year term of employment and two-year non-compete requirement were both unacceptable. Finally, there was a requirement that, if she ever left, if Claudia didn't give at least 90 days notice, she would have to pay back her last year's bonus, commonly called a "clawback."
Two weeks later, when Claudia was served with legal papers by her then-former employer, alleging she'd shared trade secrets and committed fraud regarding her sick days, she knew this was surely not going to be the best chapter in her career story. In fact, it was little short of a nightmare. How could it all have gone so wrong?
LESSON TO LEARN: Ending an employment relation in the right way is far more complicated than most people believe. Resigning from a job, and transitioning to another, is deceptively complex, as the process is just loaded with potentially serious risks. If not handled with caution and care, resigning from your job can be extremely costly. There are, though, identifiable precautions that you can take to eliminate, or at least minimize, your risks in resigning.
WHAT YOU CAN DO: Over the years, we've identified 21 precautions you should take - or at least consider taking - to eliminate, or at least minimize, risks in resigning form your job. Here's our list.
A. BEFORE You Give Notice
1. Must You Give Notice?: By "notice," we mean "notification that your last day of employment will be in a certain, specified number of days, weeks or months." No law requires notice of resignation, although sometimes it is legally required, for example if you've signed a contract that requires you to give notice.
The purpose of giving advance notice of resignation is to give your employer the opportunity and time to arrange transition of your duties, and for you to cooperate in that process. It also provides you with an opportunity to do what you can not to "burn bridges" of any kind - with colleagues, clients or your employer. Giving advance notice is generally in your interests, and in your employer's interests, as well, as a matter of mutual professionalism, and as a way to preserve good feelings post-employment relation. It's considered poor form not to give notice.
On the other hand, giving notice may not be in your interests if you are certain that you will be harmed by doing so; as an example, employers of some of our clients have reacted to receiving notice by trying to sabotage the employee's next job. If it's absolutely necessary to start a new job, or to attend to personal matters before starting a new job, or if you feel reprisals may take place, it's not absolutely necessary to give advance notice. Don't forget: that these days many employers don't give any notice at all when terminating individuals; sometimes terminated employees are even immediately marched out the door, at times accompanied by guards.
2. Are You Certain You Really Want to Leave?: Perhaps the most fundamental precautions to take in resigning from your job are these two questions: first, why are you leaving? And second, are you sure you really want to leave? At times, disappointment and disillusionment can blind us to the very substantial blessings and opportunities we enjoy. At other times, the grass on the other side of the street seems far greener than it really is.
Perhaps the worst mistake is leaving a job because you've concluded that you will never receive rewards, promotions or other objectives when, in fact, you've never clearly or resolutely requested those very same rewards, promotions or other objectives. Too many people forget that "If you don't ask, you won't get." You may say to yourself, "I'm sure they know I'm unhappy, and why I'm unhappy," or "I shouldn't even have to ask for this," but you must not forget to consider your boss's point of view for a moment: he or she is probably preoccupied with 1,000 other things that your dissatisfaction and its causes may not be nearly so obvious to him or her as you think.
3. Are You Sure You're "Free" to Leave?: There are a surprising number of reasons you may not be "free" to leave your employment These include: (a) employment contracts you may have entered into with a defined "term" of employment; (b) retention agreements you may have signed by which you were paid a sum of money to stay for a period of time after, commonly, a merger of companies; (c) so-called "garden-leave" agreements you may have signed by which you agreed to give a certain number of days, weeks or months of pre-resignation notice; (d) non-compete agreements (and related restrictive covenants) you may have signed that limit where you can work in the future; (e) immigration law requirements that permit you to work in a country only so long as you are working for a certain employer; (f) agreements you may have signed that require you to pay back to your employer monies it gave to you in the past if you don't work for a certain period of time, such as (i) education grants, (ii) relocation payments, (iii) even certain bonus awards; (g) loans that you may owe your employer that require immediate repayment upon resignation; (h) so-called "golden handcuffs" that entail loss of unvested options, restricted stock and other entitlements that have not yet vested; (i) even provisions that you never signed, but exist in an employee handbook, that say that employees who do not provide a minimum of, say, two months notice will be considered fired for "cause," with all of the negative implications that may have for your finances and reputation.
4. Secrecy About Your Intentions Is Essential: There are many reasons to keep you intentions to resign to yourself. Everyone has interests, and each person's interests are different. In fact, you can put a friend into a very difficult spot - even a situation harmful to him or her - if you share your intentions. Some people, including HR rep's, supervisors and recruiters have a legal obligation to share such "news" with your employer. Should your intentions somehow get out, it may then become impossible to change your mind, even if your new job falls through. As Ben Franklin said, "Three can keep a secret, if two of them are dead." And as former Intel Chairman Andy Grove entitled his book, "Only the paranoid survive."
5. Get Your Next Employment Confirmed First: If there's one pre-resignation precaution you need to remember and follow, it's this one: you don't want to resign and then later find out that your next job hasn't materialized. Nothing could be worse.
While nothing you can do can make 100% sure your next job will become a reality, you can and should do everything in your power to make sure there are as few hitches as possible in the process. That's accomplished by carefully inquiring about each of the material points of your new job with your future boss of HR, and obtaining from them a written confirmation. Sometimes those will be set forth in an offer letter, or even a contract; most people get neither. Even that shouldn't stop you from preparing a written confirmation of your own, and asking you future boss for his or her written approval, by email or letter. Any written confirmation should include such things as your start date, your title, your responsibilities, your compensation, your benefits, your reporting structure, and the location of your office. However you do it, do everything you can to get your hiring confirmed in writing from your new employer before submitting your resignation to your present employer.
6. What You Can - And Can't - Take With You: This one's easy: keep what's yours; leave what's theirs. However, sometimes it's hard to distinguish between the two. The difficulties usually arise with (a) lists of information, such as your personal rolodex; employers often view these as their confidential information, trade secrets, or customer list; (b) copies of documents, such as the best research report you wrote two years ago that you'd like to keep as a writing sample; employers often view these as their proprietary property; and (c) smaller pieces of equipment, such as cell phones, Blackberry's, pagers, laptops and the like. As a general rule, if there is a dispute over who owns equipment, surrender it after taking personal information off it. If there's a dispute over who owns information or documents, give it to your employer but keep a copy. One special precaution: especially if you believe you may end up being sued by your previous employer for any reason, if your home computer has any company-related files on it for any reason, you would be well-advised to replace the its hard drive, and install onto the new hard drive only personal information. This way, you can't be accused of retaining or sharing company information in the future.
7. Strategic Timing of Your Departure: Timing is a big part of resigning. The important message here: don't fail to take into account important upcoming dates of all kinds. These include (a) the date on which your bonus will be paid; (b) vesting of stock options, restricted stock, and the like; (c) your hire-date anniversary, that may affect future pension credits; (c) 401k contribution dates; (e) end-dates of present insurance coverages, and start-dates of future insurance coverages, to ensure no gaps in between; (f) scheduled pay raises, for final salary may impact pension and other long-term payment calculations; (g) long-term retirement and health plan "rules" of 65, 75 and the like, that are based on age and years of service.
8. Consider Having an Employment Attorney "On Call": In employment matters, it's always preferable to keep attorneys - and even mention of attorneys - out of discussions. That being said, knowing your legal rights, and having an attorney ready to act in the event of unforeseeable events, may be a smart idea. You don't want to experience delay if, as examples, you're accused of impropriety, served with legal papers, or publicly defamed.
B. WHEN You Give Notice
9. Who to Speak With First: As a general rule, it's proper procedure to give notice of resignation directly to your immediate supervisor, provided he or she is available; if not available, then to his or her immediate superior. That being, said, if you have a "rabbi," mentor or "godfather" in your organization, and that person has been especially helpful in the course of your career, it may prove wise to provide that person with a respectful "heads-up thank you" before giving notice. These sorts of special business relations need to be treated with the utmost sensitivity.
10. How Much Notice?: The first question is "Have you agreed to give at least some minimum notice?" If so, you should honor that agreement. If not, the proper notice period depends on you, your title, and your level of responsibilities. On a clerical level, the most common notice period is two weeks. For those with greater responsibilities, the expected level of notice rises to some four weeks; whether there are others who can step in to fulfill your essential tasks may dictate even greater notice. It's not unheard of for senior executives with unique talents and relations to give 60 to 90 days notice. [Bear in mind the dictates of strategic timing, laid out in Precaution 7, above.]
11. What to Say, and How to Say It: You should give your resignation in person, with an immediate follow-up letter. In both your in-person, oral resignation, and in your follow-up resignation letter, three things are essential: First, "I've decided to resign." Second, "My last day with the company will be.[a certain date.] Third, "Thank you for the opportunity to work with you." Any more than that can only hurt you. You should specifically avoid negativity, your reasons for leaving, and the identity of your next employer. You should avoid responding to emotional pleas. Instead, you should be clear, dispassionate and resolute. This 1 - 2 - 3 approach is, without a doubt, the most effective and least risky way to submit your oral resignation.
12. Keep Your Emotions in Check: Leaving a job entails ending several close and important relations at once. It can be an emotional time, with both good and bad emotions rising to the surface. You should do everything you can to keep those emotions, of every kind, beneath the surface. It always helps to do all you can to reduce stress and anxiety at a time like this by extra measures of, among other things, exercise, prayer, yoga, meditation and other non-harmful practices. Likewise, this is a good time to stay clear of relations or situations that usually induce anxiety.
13. Be Prepared for a Counter-Offer to Stay: Counter-offers, and acceptance of counter-offers, are becoming more and more common. In fact, some clients seek employment opportunities elsewhere merely to provoke a counter-offer from their present employer. We advise our clients to treat counter-offers with supreme suspicion because "If they didn't appreciate you before you got another job, are you sure they'll truly appreciate you after that prospective job is no longer available to you?"
If you're considering accepting a counter-offer, there are three essential points to insist upon: (a) that it must be placed into a written, signed agreement, (b) that it be completed and signed in just a few days, to ensure that it does not merely "spoil" your new job possibility, and (c) that it clearly state that the promised promotion, raise, bonus or other reward, be given to you "guaranteed, in all events, and to last no less than one full year." Otherwise, you may be promoted for one day and then fired, or promised a bonus next year, but fired next week.
14. Be Prepared, As Well, to Be Shown the Door: It's also possible that, upon your giving notice of resignation, you may be fired "on the spot." What's the likelihood? You can generally tell by how your employer has acted in the past. It always pays to be prepared to be shown the door. Besides the other precautions noted above, it's always wise to quietly remove personal information from your office computer, take home copies of non-secret "portfolio" materials, and quietly make an inventory of purely personal items - pictures and the like - in your office, for later removal.
C. AFTER You Give Notice
15. Visiting HR for the "Exit Interview": Over the past few years, a new office "ritual" has become commonplace, in which HR inquiries and issues are answered, completed and resolved. At least those are the espoused purposes of "exit interviews." In most companies, participation is not mandatory; if your company claims it is mandatory for you, you might ask what the "penalty(s)" may be for refusal.
For your purposes, bring a pad, and ask all questions you may have, including: (a) Who should I contact in the future if I have questions?; (b) Can I have a copy of my HR file?; (c) How do I arrange for continuation of various insurance policies?; (d) When returning keys, cell phones, ID cards and the like, do I get a receipt?; (e) Will I get paid accrued but unused vacation, personal and sick days; if so, how many?; and (f) How long do I have to submit receipts for unpaid business and/or medical expenses?
HR may have its own objectives to be fulfilled in an "exit interview," about which you must be cautious. They include: (a) getting you to sign things you should not sign, such as releases; (b) asking why you are leaving, which is not their business; (c) reminding you of your confidentiality (and possibly non-compete) obligations; (d) asking you where you'll be working, which is not their business, and (e) giving you your federal C.O.B.R.A. insurance-continuation forms.
In your exit interview, please don't ever consider doing these four things: (1) believe your HR rep is your friend;
2) sign anything other than a receipt for forms given to you; (3) criticize former colleagues or bosses; or (4) discuss your future plans.
16. Consider Committee and Board Memberships: Your job may entail your participation on internal committees and task forces, as well as external trade groups and associations. Though it is often automatic, consider how best to resign from each internal group, making sure not to burn bridges in doing so. If you've acted as your employer's representative on external boards and the like, your resignation from your present job may not require your complete resignation fro the trade group or association, but merely a re-designation as an at-large member. Don't presume you need to resign from such trade groups upon resignation, as they may prove invaluable to you in future employment.
Incidentally, always inquir about whether your service on boards and committees entitles you to continued protection of insurance coverages, including "directors and officers" ("D&O") policies, and "errors and omissions" ("E&O") policies. If you believe fiduciary obligations may leave you open to future lawsuits, request written assurances of continuing insurance and indemnity coverages, as well..
17. Trade Secrets and Later Competing With Your Employer: There are two kinds of restrictions that may continue to affect you after you leave your employer: (a) those the law places on you, and (b) those only you can place on yourself by signing an agreement to do so. The first category - the kind the law places on you - is aimed mostly at not permitting you to steal things from your employer, including valuable "trade secrets," which are defined as "information, developed through effort and expense, and kept secret, that gives your employer a business advantage." Examples include chemical formulas, customer lists and marketing plans. These are protected by the law; you can go to jail for taking them with you.
The latter category - restrictions you've agreed to - include the common "non-competition" agreement and their "cousins." If you haven't signed one of these, either as a separate agreement or as part of an agreement to accept employment, stock options, a bonus, or some other reward, you can usually presume you'll be free of future restrictions.
As a general rule, unless you (a) steal secrets or other valuable property, or (b) violate the terms of a written agreement to restrict your future activities, you are entirely free to later compete with your employer, consistent with our free enterprise system.
18. Remember: A Resignation is Not a Release: It's important to bear in mind that resigning from your job entails only one thing: ending the relation; resigning has no direct effect on moneys owed you, or other claims you may have against your employer. By resigning from your job you are not releasing your employer from any obligations your employer may still have to you, of any kind, whether they are regarding pension calculations, raises promised but denied, illegal harassment or discrimination, or regarding retaliation against you for "whistle-blowing."
For this reason, This means, first, that you should never sign any release form or similar document handed to you at your exit interview or sent to you afterwards. Also, be aware that you have more time to make any claims you may have against your employer. For federal "Sarbanes-Oxley retaliation claims, you have 90 days. For discrimination claims, you may have 180 or 310 days, depending on the state you live in. For claims of defamation, you may have up to one year. For claims of negligence or fraud, you may have up to three years. For claims of broken contracts or promises, you may have up to six years. These deadlines vary from state to state and, of course, should be discussed with an attorney.
19. Are You Due Severance? There's a Good Chance: It may seem counter-intuitive, but even those who resign may be due, or be able to collect, severance. First, under certain agreements or benefit plans, and under certain circumstances, you could be entitled to resign and still collect severance. For example, after a corporate merger, many companies request that you remain in your job, but entitle you to severance if your duties change substantively. In this case, you can resign, and collect severance, too. As another example, employees who resign after they have been harassed, discriminated against, or retaliated against for "whistle-blowing" may both resign and collect severance, too. Never presume you're not entitled to collect severance.
20. References, Recommendations and Departure Statements: Though nearly every company has a policy against giving out post-employment "references," one of the best things you can do before you resign is to confidentially ask superiors, colleagues and even clients if they would serve as future references for you. Especially if asked respectfully, chances are they will say "yes." One thing's for sure: you'll have enhanced credibility, leverage and confidence in every future interview if you can readily produce written testimonials to your dedication, knowledge, abilities and value. We suggest you offer to produce a "draft" for such people, as these days everyone's so busy, and to do so only makes it that much easier for them. Incidentally, we refer these as "departure statements" to counter any suggestion from HR representatives that they violate corporate policies.
21. When Can You Tell Others of Your Move?: That's a trick question, meant to tell if you're still alert after reading this far. There are two parts to your "move," departure and arrival. Regarding your departure, you're entirely free to tell people you'll be leaving, as soon as you've given your notice of resignation to your superior.
The "arrival" information is a very different story. While the fact you're leaving can be shared, you should do your utmost not to tell clients and customers where you're going, because this invites potentially severe legal troubles. Why? That's because you could be accused of "soliciting" them to go with you, which would be both a reason for your company to fire you before you left voluntarily, possibly suing you for theft of trade secrets or interfering with their business while you're employed by them, as well as a reason for your "old" employer to contact your "new" employer and insist they not hire you, or face a "poaching" lawsuit. This is essentially a lawsuit in which one company accuses another of "stealing" its employees and clients, illegally. It's a messy thing, something you don't want to be part of, and something you can avoid by keeping your silence about where it is you're headed. It's for this reason "where you're headed" is something to be shared only after "you've arrived there." Once you've left, then soliciting the business of old clients and even former colleagues to come join you becomes "fair game."
These are not all of the precautions that need by taken by resigning executives, but they are the 21 precautions we view as most necessary. Every person, every assignment, every company and every transition has unique problems. You should try to customize your own precautions to address your employer's facts, history and culture.
Alan L. Sklover, Founding Member of Sklover & Donath, LLC and Founder of Sklover Working Wisdom, empowers employees worldwide to stand up for themselves at work. From his offices in New York City's Rockefeller Center, Alan has devoted his 28 years of professional life to counseling and representing employees worldwide on how to negotiate and navigate for job security and career success. Mr. Sklover's practice concentration is in the negotiation of senior executive employment, compensation and severance agreements, and in counseling senior executives in career navigation. Learn the trade secrets and 'uncommon common sense' of Attorney Alan L. Sklover, the leading authority on "Negotiating for Yourself at Work™" at http://skloverworkingwisdom.com.
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