Negotiating Retention Agreements

negotiating retention agreement

The Maura Greene Law Group can help you understand and negotiate your retention agreement. There has been a high level of employee turnover in recent years. This has led to an increase in the use of retention agreements by employers, as well as an increase in employees requesting retention agreements. 

What is a Retention Agreement?

Retention agreements are contracts that employers use to help convince employees to remain employed. They often include monetary benefits and incentives to keep employees from leaving their employer for a different job. 

Retention agreements may include:

  • The payment of a bonus
  • Stock
  • Additional benefits
  • A promotion
  • Change in title
  • Other incentives for an employee

In exchange, the retention agreement will require the employee to agree to remain with the employer for a certain period of time.

If an employee leaves, depending on the circumstances and terms of the retention agreement, an employee may forfeit or have to return all or some of the benefits they received. 

When is a Retention Agreement Appropriate?

1. Change Of Control: If your employer is in the process of a merger, acquisition, or other change of control event, it may want or need you to remain with the company for a period of time as part of the transaction.

2. Critical Milestone: If your employer is nearing a critical point in its development (such as a funding point, IPO, succession in leadership, etc.)​, it may want to ensure you will be with the company during this critical stage. 

3. Rewarding An Employee: Your employer may offer you a retention agreement to acknowledge, and retain, your outstanding work.  

4. Preventing Competition: Your employer may offer a retention agreement to prevent you from leaving to work for a competitor. You may be highly skilled, have sensitive knowledge, have close relationships with customers, or possess other attributes that your employer doesn’t want to lose.

What Can I Negotiate In My Retention Agreement?

You should carefully review and consider your retention agreement. Remember: once it is finalized, it will be a binding contract.

Here are a few points you may want to consider negotiating:

  1. Amount, timing and form of any bonus, commission or monetary amount.
  2. Whether your employer is requesting a release as part of the retention agreement.
  3. The length of time you must remain with the company. 
  4. Confidentiality and non-disparagement terms. 
  5. Vesting and exercise terms and conditions if stock or equity is involved. 

Remember: retention agreements are unique and different – there is no “one size fits all.”

Bottom Line:

If you need help negotiating and securing a strong retention agreement, contact us today. 

Contact us at 617-936-1580 or email us at 

The Not So Fine Print:

We see patterns in our practice, like the ones described above. However, every case has its own unique facts. Before you take any action, you should contact an employment lawyer and get advice on your own situation. We can’t provide legal advice here and this isn’t intended as legal advice. It is best, if possible, to establish a relationship with an attorney before a workplace issue turns into a crisis. Employees who have received a verbal or written warning or performance improvement plan should contact counsel now. Ditto for employees who are seeing their doctor for workplace-related stress or anxiety.