Executive relocation: ensuring transatlantic moves succeed

As we enter September and summer slowly draws to a close in the UK, the idea of a transatlantic shift may start to become a strategic consideration for senior executives rather than just idle daydreaming. The US beckons with opportunity, energy and the promise of both career growth and a lifestyle reset. For others, the pull is in the opposite direction, stepping away from the relentless pace of New York for the quaint appeal of the UK.

Whether moving for opportunity or for balance, these decisions require careful planning and preparation. From immigration and employment contracts to tax and compliance, planning ahead is essential to ensure the move works both personally and professionally.

This article is intended for senior executives considering a move, particularly those transitioning between the UK and the US. It provides a brief guide to understanding the legal landscape, avoiding common pitfalls, and executing a clean, confident exit.

The employer’s strategy: know what you are dealing with

When a senior executive leaves, employers do not just wave goodbye; they put a range of well-established protective measures into action:

• restrictive covenants: non-compete, non-solicitation, non-dealing, and non-poaching clauses which may impact on when the senior executive can start in the role or what they can do when they start;
• confidentiality obligations: often perpetual and enforceable even without a written agreement;
• garden leave: keeping the executive on payroll but out of the business, but also out of the market;
• fiduciary duties and implied terms: especially relevant if the executive is moving to a competitor or setting up their own business;
• executive compensation structures: forfeiture and clawback provisions tied to RSUs and LTIPs.

Executives can be caught out by contractual provisions they have not reviewed for years. Careful planning and early engagement can help minimise the risk of disputes and protect financial outcomes.

The UK perspective: what executives must know

• In England, restrictive covenants are enforceable only if they go no further than necessary to protect a legitimate business interest. This is often where disputes can arise. Courts will scrutinise their duration (typically 6-12 months); geographic scope (must be reasonable); and business interest (confidential information, client relationships, workforce stability, etc).

Executives should:

• review their contract: are the covenants reasonable and enforceable?;
• plan the exit: timing, messaging, and early legal advice are critical;
• negotiate release: employers may agree to waive or modify restrictions; and
• assess fiduciary duties: this can often be powerful leverage for an employer and an area of risk for an employee.

A carefully crafted exit plan ensures compliance with renegotiated contractual obligations, allowing for a quiet exit with no bridges burnt in the process.

The US perspective: an assortment of laws

In the US, the enforceability of restrictive covenants varies state by state:

• California: non-competes are generally unenforceable;
• Delaware, New York, Florida: more employer-friendly;
• FTC developments: federal efforts to limit non-competes have stalled, but momentum remains.

Executives moving within the US, or from the UK to the US, should:

• understand state law: where is the new role based and where was the old one?;
• review RSU plans: many are governed by Delaware law, even if the executive is UK-based; and
• consider clawbacks: US plans often include broader clawback rights.

Cross-border moves between the UK and US

Moving between the UK and US adds complexity, for example:

• tax implications: PAYE vs IRS, double taxation treaties;
• immigration: visa sponsorship, work permits, and timing;
• contractual enforceability: UK covenants may not be enforceable in the US, and vice versa; and
• executive compensation: RSUs, LTIPs, and bonus schemes may be governed by foreign law.

Executives should seek dual-jurisdiction advice on employment, tax, and immigration, and review incentive plans – are clawbacks enforceable across borders?

Executive compensation: a double-edged sword

Employers increasingly embed restrictions into compensation schemes, for example:

• clawbacks: triggered by misconduct, reputational harm, or financial restatements;
• forfeiture: RSUs and bonuses may be lost depending on the reason for leaving, the timing of the exit or due to alleged breaches of contract;
• deferral: UK FCA and PRA rules require deferral to enable malus provisions.

Executives should:

• understand the triggers: what constitutes ’cause’ or ‘misconduct’?;
• negotiate clarity: when agreeing terms on joining, avoid vague definitions that could be weaponised on exit;
• consider timing: when will awards vest, are they portable, can they be accelerated?; and
• negotiate new terms: carefully manage relationships – ensure the new employer understands and supports the transition.

Enforcement: what happens if it goes wrong?

If disputes arise, enforcement mechanisms differ. In the UK, High Court injunctions are fast, powerful, and often used to restrain competitive activity, whereas in the US, temporary restraining orders (TROs) and preliminary injunctions vary by state.

Executives should:

• avoid surprises: know what relief the employer might seek;
• prepare for litigation: especially if joining a direct competitor; and
• protect reputation: legal disputes can be public and damaging.

Early and proactive engagement with a former employer, coupled with clear assurances about the nature of the new role, can often help reduce the likelihood of disputes and injunctions.

Practical steps for executives

Before making a move:

1. review your contract (and other documents): understand all post-termination obligations;
2. seek legal advice: preferably early, when planning a move, and from someone with experience in senior executive moves;
3. protect your reputation: avoid public disputes or breaches;
4. plan your communications: internally and externally; and
5. negotiate your exit: career moves are a normal part of business life that do not need to end in litigation, so be prepared to challenge anything unreasonable, but compromise too.

Executives who excel in their exit plans do so by being proactive, strategic, and discreet, leaving under the radar and landing unscathed. By understanding the legal landscape, negotiating strategically, and seeking expert advice, executives can make bold career moves without stepping into legal quicksand.