What You Should Know Before Signing A Severance Agreement
You’ve just learned that you are going to be terminated from your job. Naturally, you are worried about the future and are unsure of how to cover your expenses between now and when you find other employment. When your current employer offers a severance agreement that will provide some period of post-employment pay and benefits, you may be eager to accept in light of your concerns about money.
Before you accept any agreement, however, it is important to review it in consultation with an employment discrimination attorney. Despite what your employer may imply, severance agreements are not just goodwill payments to help you get by. You may be signing away important rights and protections. If you’ve been offered a severance agreement, contact Ellwanger Henderson to discuss your agreement with one of our skilled employment law attorneys.
Are Severance Agreements There To Help My Employer Or Me?
Severance agreements, also known as separation agreements, are typically offered because the company wants to protect itself from competitors and from liability. Therefore, your agreement may contain the following provisions:
A noncompete clause: This might prevent you from working for a competitor within a certain geographic radius and for a certain period of time. Such provisions can make it difficult or impossible to find another job in your field during that time.
Waiver of liability or release of claims: This is a critical element of nearly any severance agreement. By accepting the agreement, you forfeit your right to sue the company for any wrongdoing that occurred during your employment. If you experienced harassment or discrimination or were wrongfully terminated, a release of claims means that you cannot pursue litigation related to these issues.
Confidentiality and nondisclosure agreements: These prevent you from discussing workplace matters related to your former job or the company. In combination with the provisions mentioned above, confidentiality agreements can further impact your ability to find other work and pursue litigation.
You are not required to accept a severance agreement, and you should understand what you are agreeing to before deciding to accept.
How Long Do I Have To Consider A Severance Agreement?
Some employers will say or strongly imply that you need to accept a severance agreement immediately. This is untrue. In most cases, you have 21 days to consider the agreement before signing and another seven days to change your mind after signing.
The bottom line is that this type of document is binding, so if the severance agreement has language regarding such things as confidentiality policies, noncompete agreements or liability of the company or employee, you need to have it reviewed by an attorney. You should never feel pressured to make an immediate decision or sign without fully understanding the agreement.
Do I Have To Sign A Waiver Or Release To Receive My Severance Pay?
Your boss will probably try to pressure you into signing a waiver before they pay your severance. Don’t sign anything without a lawyer present. If you have an employment contract with your employer and it requires a set amount of severance pay, they must give it to you whether you sign a release. However, if your employment contract does not guarantee you severance, your employer has the right not to offer it to you unless you agree to sign a waiver.
How Can An Attorney Help Me?
Most people don’t realize (and your employer likely won’t tell you) that severance agreements are often negotiable. Even if you have no intention of suing your employer or working for a direct competitor, your ability to do so gives you leverage. When you contact our firm, one of our experienced lawyers will review the agreement with you and explain your benefits and obligations. We can then represent you in negotiations for more favorable terms, such as increased/extended severance pay and benefits.
Let Us Help You Protect Your Rights – Contact Us Today
At Ellwanger Henderson, we are proud to advocate for workers in employment law matters throughout the United States. To learn more about how we can help you, contact us to schedule a free initial consultation. You can reach out online or call 737-248-1321.