Double Trigger

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Double trigger refers to a clause in a contract that requires two events to occur for a certain action to occur. It is often used in employment contracts to protect both the employee and the employer in case of a change in control or termination of employment.

What is a Double Trigger?

A double trigger is a provision in an employment contract or severance agreement that requires the occurrence of two events for certain benefits to be triggered. These benefits can include severance pay, accelerated vesting of equity awards, or other forms of compensation. The double trigger concept is used as a means of protection for both the employer and the employee.

For the employer, it helps to ensure that benefits are paid only in specific circumstances, such as a change in control or termination of employment. For the employee, it provides a safeguard in the event of job loss, ensuring that they receive compensation in certain situations. The details of a double trigger provision can vary depending on the individual agreement, but they generally serve as a protection mechanism for both parties in an employment relationship.

Importance of a Double Trigger

The significance of a double trigger clause in employment contracts is to protect employees in case of a change in control or termination of their employment. This type of clause typically requires that two specific events occur before a predetermined action is triggered, such as the vesting of stock options or the payment of severance.

The use of a double trigger clause helps to ensure that employees are not left without compensation or benefits in the event of a change in the company's ownership or their termination from the company. It can provide significant peace of mind for employees and help maintain stability in the workforce during uncertainty. In the event of a change in control, employees may be concerned about the future of the company and their own job security. A double trigger clause helps mitigate these concerns by ensuring that employees are compensated if the change in control and their termination occur. It can help keep valuable employees with the company during a transition period, which benefits both the employee and the employer.

In the event of termination, the double trigger clause can provide employees with a safety net if they lose their job due to circumstances beyond their control. For example, if the company is acquired and employees are laid off, a double trigger clause may require severance payment. It can provide financial support to employees during difficult times and help ensure they are not left without a source of income.

Double Trigger Benefits

A double trigger refers to a clause in an employment agreement that gives an employee the right to receive certain benefits, such as a severance package, in the event of either a termination of employment or a change in control of the company. Here are some of the benefits of a double trigger:

  • Financial Security

    A double trigger provides financial security to employees by ensuring they receive a severance package for either a termination or a change in company control.

  • Job Stability

    By offering a severance package in the event of a change in company control, double triggers can help provide job stability for employees.

  • Protection for Key Employees

    Double triggers are often included in employment agreements for key employees, as it provides a financial incentive for them to remain with the company through a change in control.

  • Attract and Retain Top Talent

    By offering attractive employment benefits, companies can attract and retain top talent.

  • Encourages Long-Term Commitment

    A double trigger encourages employees to make a long-term commitment to the company, as they know they will be protected in the event of a termination or a change in control.

  • Alignment of Interests

    Double triggers help align the interests of employees' interests with the company's interests by providing financial benefits to employees in the event of a change in control.

It is important to note that while double triggers can offer various benefits, they can also be costly for companies, as they may need to provide a large severance package to multiple employees in the event of a change in control.

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Why Hire a Lawyer for a Double Trigger

It is advisable to seek the assistance of a lawyer when drafting a double trigger in the United States. A lawyer can ensure that the terms of the double trigger are clearly defined and in compliance with applicable laws and regulations.

Here are some reasons why you might need a lawyer to draft a double trigger:

  • Legal Compliance

    A lawyer can advise on the legal compliance of the double trigger and ensure that it does not violate any employment laws or regulations.

  • Knowledge of State Laws

    Each state in the U.S. has different laws regarding employment and severance packages, and a lawyer can advise on the specific requirements in your state.

  • Drafting Clear Language

    A lawyer can help draft clear language for the double trigger so that the terms and conditions are unambiguous and easily understood.

  • Protecting the Company's Interests

    A lawyer can ensure that the double trigger protects the company's interests while also providing employee benefits.

  • Negotiating Terms

    A lawyer can assist with negotiating the terms of the double trigger and ensuring that both parties agree to the terms.

Key Terms Related to Double Trigger

Here are some key terms related to double triggers in the United States:

  • Termination of Employment: Refers to the ending of an employment relationship between an employee and an employer.
  • Change in Control: Refers to a significant change in ownership or management of a company, such as a merger, acquisition, or sale of the company.
  • Severance Package: A financial arrangement provided by an employer to an employee in the event of termination of employment. A severance package may include payment for unused vacation time, continued health insurance coverage, and a lump sum payment.
  • Key Employee: An employee who holds a critical role within a company and whose loss could have a significant impact on the company's operations.
  • Employment Quo Ante: A term used to describe the state of affairs that existed prior to a change in control. A double trigger may provide for the payment of a severance package in the event of a change in control, based on the status quo ante.


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