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Bad Leaver

A "bad leaver" is a term used to describe a person who leaves a company under certain circumstances that are considered detrimental to the company. The exact definition of a bad leaver can vary depending on the context and the specific provisions of an employment contract or shareholders agreement. Some common examples of actions that may qualify as a "bad leaver" event include:

  • Breach of contract or company policy

  • Theft or embezzlement

  • Fraud or misrepresentation

  • Engaging in competitive activities while still employed

  • Violating non-compete or non-solicitation agreements.

When a bad leaver event occurs, the company may be entitled to take certain actions, such as repurchasing shares at a reduced price or terminating certain benefits or agreements.

The definition and the consequences of a bad leaver are usually defined in the contract, shareholders agreement or partnership agreement.

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