Nonprofit Employment Agreement

The clear demarcation of work obligations and the transparency of terms and conditions of employment and benefits will distinguish your organization from potential employers who are reluctant to put things in writing. Candidates who come from the corporate sector or are recruited through an agency will likely expect you to offer an employment contract. If they are not offered a deal, it can give strong candidates a reason to pause – or even let them pass. “Termination without giving reasons. HSC may terminate Mary`s employment at any time without giving reasons after age 31. terminate December 2022 in writing with sixty (60) days` notice; however, in the event of termination of employment without giving reasons under this Section, HSC Mary will continue to pay as severance pay the salary and benefits remaining under this Agreement for the shorter period of (i) six (6) months or (ii) the remaining period of employment ended on December 31, 2024. In recent years, not-for-profit organizations have been preparing for new ways to share the core responsibilities of their organization with their employees. The practice models associated with creating a culture of philanthropy are an example of this. The recent “Bright Spots” study by Jeanne Bell and Kim Klein describes how a number of nonprofits have used these models.1 Hiring and firing a CEO (president or CEO – choose the title) of a nonprofit is a daunting task. Basically, it is the equivalence of a root canal treatment by the voluntary leader. Why is it so difficult? Because the people who have to do the work are usually volunteers with full-time jobs and lives that they also lead and struggle with.

And hiring or firing a nonprofit executive can (and usually is) a short-term, full-time job for at least one or more volunteers. Lawyers from Avisen Legal`s nonprofit practice team and the labor law practice team hope to give at least some advice to those going through the process of this series: hire (and fire) the head of a nonprofit. While most non-profit labour relationships are at will and allow the employer or employee to terminate at any time, some employees are hired under an employment contract. These are usually high-level employees such as executives and managers. The existence of a contract is advantageous on both sides, as it offers the employer the advantage of a minimum-term appointment of the employee and gives the employee the certainty that he will not be dismissed before the end of the mandate without giving reasons. In the case of Do, there was nothing written and the result was free for everyone. In Mary`s case, the carefully written document provided clarity on both sides – the kind of clarity that allows nonprofits to avoid bad situations in the first place. However, you can avoid these problems with a proper language.

For example, employment contracts often contain language about terminating the agreement at will and changing certain tasks and responsibilities. Self-determination theory sees this ability to achieve autonomy, competence, and connection with others who do the same work in the same place as central to intrinsic motivation – and intrinsic motivation is needed to create an entire powerful organization of many employees with personal motivations who want to experience it. This happens in several ways. For example, in a study by a non-profit organization, researchers found that knowledge transfer improves more through intrinsic motivation than extrinsic.7 This integrates the intention of the whole into the autonomy of the individual employee. This article draws on the expertise of Grace Davies, a Minneapolis-based lawyer with a particular interest in product liability, medical malpractice, and workplace discrimination. Require that disputes under the employment contract be resolved by arbitration and not by litigation. While there has long been some distinction between sectors – for-profit employees have been described as more extrinsically motivated (reward-driven) and public and nonprofit employees as inherently motivated (goal-driven) – the standard business model, even in nonprofits, remained in an image of command and control. This image of command and control was based on this extrinsic reward model until thirty years ago, when the era shifted from an industry-based economy to a knowledge-based economy. And as with any change of era, change prevailed before behavior changed, now we must gradually throw away the rubble – the artifacts of the old era – and start building our own practices that are still experimenting. Another reason to consider an employment contract is to give a clearer justification for the termination of the employment relationship due to underperformance or other breaches of the contract. If work obligations, confidentiality agreements or non-compete obligations are included in your agreement, both parties are required to comply with them.

The ability to refer to the agreement in performance appraisals and other audits can help hold everyone accountable. We generally advise employers not to require employees to sign their letters of offer. Asking for a signature can lead to the false assumption in the employee`s mind that the letter of offer is a contract and can undermine the employer`s claim that the job was done at will. Employers often ask how they can prove that the employee has accepted the terms of the letter of offer if it is not signed. Proof that the letter was sent and that the employee showed up for work on the first day is usually sufficient proof that the employee accepted the terms of the letter of offer. An employment contract protects the employer if it contains restrictive agreements such as non-compete obligations, non-competition clauses for employees and customers, and the protection of confidential information. Many of these provisions may be the subject of separate agreements on these points, but these rights are generally more enforceable if they are explicitly negotiated under an agreement (all employees owe their employer a certain duty of loyalty during employment). An employment contract protects the employee if it contains severance pay obligations that specify exactly what the employer must pay the employee in the event of the employee`s dismissal in certain circumstances. This fundamental balance occurs independently of the industry. One of the most compelling reasons to use an employment contract is to attract the strongest candidates for key positions, especially at the executive level. HSC board members simultaneously looked for a replacement CEO and decided to hire Mary Smith.

The board is excited about Mary, but after learning a hard lesson in Do`s case, he asked his lawyer to prepare an employment contract and negotiate her terms with Mary`s lawyer. The two lawyers agree on acceptable terms and the four relevant sections of Mary`s contract are: (1) performance expectations, (2) annual board evaluation, (3) duration of employment, and (4) termination by HSC before the end of the term. A primary concept that guides labor law in the United States is employment at will. This means that the employee or employer can end the relationship at any time for any reason, as long as it is not an illegal reason. This also means that the termination of the employment relationship can take place without notice. This can worry the board of directors of a nonprofit that relies heavily on key employees such as an executive director, an operations manager, or a director of development. An employment contract may contain provisions that require notice, which may give a non-profit board of directors some comfort in carrying on business. Nonprofits often view employment contracts as unnecessary expenses, a barrier to trust, and a simple statement about “how long and how much.” When you analyze the terms of this language, two things stand out.

First, it begins with a general reference to the types of functions commonly understood as those of a CEO (bylaws), while addressing some of the details expected by the board of directors (fundraising, committee assignments, lobbying, etc.) that have been the source of disagreements with Doe. Does`s lawyer claimed that the operational problems arose because the board was not attentive, that there was an ongoing implied employment contract, and that Doe had been discriminated against because of his age (56 years). On the advice of his lawyer and given the lack of anything “written” after weeks of angry negotiations, HSC agreed to pay Twelve Months` severance pay to Doe to avoid litigation. With answers to such questions, you can begin to draft the employment contract. For the avoidance of doubt, keep the wording of the agreement clear and simple. It`s also a good idea to be flexible in terms of terms in case a candidate wants to negotiate, as long as you keep your limits in mind. .