Toolkit for Recruiting Association Executives

9. Negotiate Employment Agreement

The employment agreement establishes a clear understanding of the obligations, rights, and duties of both parties. Addressing these areas in the agreement will reduce potential misunderstandings, ensure stability, and provide quality control. Identifying the Association Executive’s responsibilities in the agreement can help create a more stable environment because the expectations are clear and agreed upon.

Your association will want to contact legal counsel for assistance with drafting and finalizing the employment agreement. The agreement may include the following elements:

  • Title and job description – Include objectives, responsibilities, reporting relationships, supervision of activities, and performance standards for the position. In addition, attach a job description as an appendix to the agreement.
  • Management – This clause provides the AE authority over all staffing (hiring, terminating, promoting, discipline) matters within the association’s policies and budget.
  • Performance commitment – Include a clause where the AE agrees to devote all their business time, attention, and energies exclusively to the association, and to give their best efforts and skills exclusively to performing their duties.
  • Compensation – Includes base pay, performance reviews (criteria, procedures, and timetable), and how merit increases or bonuses will be determined. Compensation is based on the position, candidate experience and education, association size, and location.
  • Benefits – may include:
    • life insurance, health insurance (employee and family), hospitalization insurance, short-term and long-term disability
    • deferred compensation, pension plan, 401(k), IRA, or SEP
    • paid vacation, holiday, sick, and personal days
    • reimbursement for relocation expenses
    • expense reimbursement (what Association will or will not cover):
    • business travel (business or first class), spouse travel (may specify expense cap), VIP lounge memberships, and entertainment expenses
    • automobile allowance
    • cellular phone and monthly charges
    • membership dues in professional associations, trade groups, and related organizations
    • professional educational courses, seminars, or continuing education
    • financial planning or tax preparation services
    • country club, health club, or luncheon club memberships
  • Term of Agreement – Specify the term of agreement making sure time frames are long enough to allow AEs to prove themselves. Two to three years is usually a mutually acceptable term. Include renewal and extension of the contract, including notification.
  • Disability or death – Detail what will happen if AE is temporarily disabled due to illness or unable to perform required duties. The association may agree to a leave of absence for a specific time. Also, address the issue of how long to continue compensation and benefits during disability. Be sure the agreement covers what happens if the EO dies during the term of employment. Depending on the size of the association, various state or federal acts may apply (i.e., Family and Medical Leave Act).
  • Termination – This section of the contract should focus on termination for cause, without cause, voluntary, involuntary, mergers, or reorganizations. Specify a time frame and method for notification of termination and how such termination occurs. The association may wish to retain the right to terminate the AE without notice in certain “with cause” circumstances (embezzlement or conviction of a felony), provided such summary action is permissible under state law. The association may wish to consider specifying severance arrangements, including outplacement assistance, should it choose to terminate the AE’s agreement.
  • Noncompete – The contract may limit the AE from becoming involved in other activities that are a conflict of interest.
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HR Toolkit for Association Presidents
View HR Toolkit - For Association Leadership to see additional HR tools to assist association presidents and their AEs.