Severance Agreements: Labor & Employment Law

Termination from your employer can be an emotional and stressful event with potentially long-lasting impacts on your working career. Terminated employees are often required to sign a severance agreement, which is a contract between an employer and an employee that specifies the terms of an employment termination. At Woodall Batchelor PLLC, we’re happy to walk you through this process to gain a clear understanding of the terms of a severance agreement.

Severance Agreements

Each situation is different and requires a document tailored for the particular employee and circumstances. Both employers and employees should discuss proposed provisions for a severance agreement with an employment lawyer. A severance agreement is a complicated document with multiple provisions that may profoundly impact an employee’s future. Severance agreements need to properly address issues such as: severance pay, continuation of health care coverage, outplacement benefits, confidentiality of the agreement references, contestability of unemployment benefits, breadth of non-compete restrictions, and the release and a waiver of claims against the employer.

severance agreement

Typically the payments of a severance agreement usually come with strings attached; mainly, that employees must give up all rights to sue the employer for any claims that they may have. Employees may be required to sign lengthy severance agreements with complicated terms and conditions to receive their payment.

If you are provided with a severance agreement, you must think carefully before signing it. You are well-advised to consult with an experienced employment lawyer to help make an informed decision. Our team at Woodall Batchelor can help you understand the legal rights you are giving up. They can explain what your legal obligations are. Finally, a lawyer may also be able to help you negotiate for more money or better terms.

Understanding Your Rights

Employers use severance agreements as a way to mitigate risk. Almost all severance agreements require employees to give up their right to sue their employer. Employers understand that in exchange for some fixed amount of money, they are buying the security that those employees will not be able to turn around and sue them at a later date.

You must make a careful assessment of whether you have legal claims that may be worth pursuing. Were you paid all of the wages, including overtime, due to you? Or, were you harassed or discriminated against at work? Were you denied a reasonable accommodation or leave rights? Do you believe you were wrongfully terminated or selected for layoff? Are there other claims you may have? Sometimes, these claims are worth far more than the severance amount being offered to you.

By meeting with an attorney, you can discuss the merits of your potential claims and whether it is worth rejecting the severance offered to pursue them. The decision about whether to accept a severance agreement may not be an easy one, but a thorough discussion of the pros and cons can help you make the right decision.

Most severance agreements impose obligations on the employee, so it is critical that you understand what they are. If you do not hold up your end of the bargain, the employer may be able to claw back some or all of the severance amount–or more. They may even able to go after you for their attorney’s fees if they prove you violated the agreement.

Learn more about severance agreements

While it is appealing to accept a severance payment offered to you when you have been let go from a job, you should always make an informed decision before signing such an agreement. With a lawyer’s help, you may be able to negotiate for more money or better terms. An employer may be willing to put more money on the table than what they’re currently offering, especially if you have significant legal claims. In addition, you may be able to get the employer to agree to better terms. For example, is the agreement mutual in its terms or are many of the obligations one-sided? Does the agreement provide for a job reference?

To find out more about severance agreements, don’t hesitate to reach out to one of our labor & employment law attorneys in The Woodlands at Woodall Batchelor PLLC.

By | 2017-10-31T18:06:40+00:00 October 31st, 2017|Labor & Employment Law|Comments Off on Severance Agreements: Labor & Employment Law