Legal Question in Employment Law in Georgia

Onerous clause in separation agreement

I am recently terminated from an executive role in a technology company. My separation agreement offers substantial incentives to waive liability, not compete, poach employees, etc. The agreement is clear to me, except for the paragraph below, which seems onerous (particularly the ''shall not assert any defense'' clause).

Is this a reasonable and common thing for a company to ask in a separation agreement? Can ''injunctive relief'' a payment of money damages?

Injunctive Relief. If You breach any of the restrictions set forth in Section B(5) above, You

agree that: (i) the Company would suffer irreparable harm; (ii) it would be difficult to determine

damages, and money damages alone would be an inadequate remedy for the injuries suffered by

the Company; and (iii) if the Company seeks injunctive relief to enforce this Agreement, You shall

waive and shall not (a) assert any defense that the Company has an adequate remedy at law with

respect to the breach, (b) require that the Company submit proof of the economic value of any

Trade Secret or Confidential Information, or (c) require the Company to post a bond or any other

security. Nothing contained in this Transition Agreement shall limit the Company�s right....


Asked on 4/30/08, 10:49 am

3 Answers from Attorneys
Glenn M. Lyon, Esq. MacGREGOR LYON, LLC, Business Attorneys

Re: Onerous clause in separation agreement

This is a common provision allowing the company to obtain injunctive relief (stopping you from doing something). You in essence are waiving the requirement that the company first show that there is not adequate monetary remedy before the court will grant injunctive relief. However, keep in mind that I would need to see the whole provision and contract to give you a comprehensive answer to your posting.

If you would like to discuss any issues further, please feel free to contact my office. My contact information is below. Thank you.

The foregoing is general information only, not specific legal advice. No attorney/client relation has been created or should be implied.

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Answered on 4/30/08, 10:57 am
James Zito Zito Law Group, LLC

Re: Onerous clause in separation agreement

Actually, as onerous as it may sound, it really isn't, and is a rather standard clause in many separation/severance/settlement agreements.

The statement that appears to worry you the most (that you "....shall not assert any defense that the Company has an adequate remedy at law with respect to the breach"), simply means that you agree that they have an EQUITABLE remedy as opposed to a remedy "at law." A remedy "at law" is a remedy that results in a MONETARY award. An equitable remedy is a remedy that gets you to do, or stop doing something. (e.g., injunctive relief). You will still be permitted to present a defense that you did not do the thing they may claim that you did in any allegation that you breached the agreement. If you have further questions, or wish to have me review the proposal in detail, do not hesitate to contact me at jzito AT bellsouth DOT net (I am sure you can figure that out)...Jim

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Answered on 4/30/08, 11:47 am
James Zito Zito Law Group, LLC

Re: Onerous clause in separation agreement

Actually, as onerous as it may sound, it really isn't, and is a rather standard clause in many separation/severance/settlement agreements.

The statement that appears to worry you the most (that you "....shall not assert any defense that the Company has an adequate remedy at law with respect to the breach"), simply means that you agree that they have an EQUITABLE remedy as opposed to a remedy "at law." A remedy "at law" is a remedy that results in a MONETARY award. An equitable remedy is a remedy that gets you to do, or stop doing something. (e.g., injunctive relief). You will still be permitted to present a defense that you did not do the thing they may claim that you did in any allegation that you breached the agreement. If you have further questions, or wish to have me review the proposal in detail, do not hesitate to contact me at jzito AT bellsouth DOT net (I am sure you can figure that out)...Jim

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Answered on 4/30/08, 11:47 am


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