Is There Something to Fear in Your Severance Agreement?

Dec 18, 2023
By admin
Is There Something to Fear in Your Severance Agreement

Severance agreements are often offered to employees as part of an employment contract at the start of a new role or when an employee is being terminated. And while severance agreements are not required by law, many employers do offer them to help an employee transition out of a role – especially if they are being let go involuntarily.

Severance agreements typically include provisions such as severance pay, continued benefits like health insurance, and outplacement services. Most importantly, severance agreements typically involve a waiver of legal claims in exchange for accepting severance, meaning you cannot sue your employer if you accept a severance package that includes a waiver of claims.

So as an employee who may be considering signing a severance agreement, you might have concerns over whether there is something to fear in your severance agreement. Below, we take a closer look at some concerns that might arise within a severance agreement and how to go about negotiating a severance package. You should retain counsel to attempt to negotiate a severance package.  If you negotiate on your own and are unsuccessful, it is likely that we will not be able to help you.

The Hidden Dangers of Severance Agreements

A severance agreement is a type of legal contract that exists between an employer and a departing employee. And while many severance agreements include several positive provisions that can help ease the transition out of a current role, there are some key points of concern that you will want to be aware of should you spot them in a severance package offer.

These points of concern include:

  1. Very broad terms: While severance agreements are not required by law, there are certain federal and state laws that exist to help govern the terms that can be included in a severance agreement. One such organization that oversees these laws is the National Labor Relations Board which returned to a longstanding precedent on severance agreement terms in January 2023. This precedent makes it clear that employers are not able to offer employees a severance agreement that requires the employee to “broadly waive their rights under the National Labor Relations Act.”
  2. Noncompete clause: A noncompete clause essentially means that you agree to not start working for a direct competitor once you have left the company, usually for a specific period of time. You may have signed this clause when you began your role, but there may be space for negotiation in your severance package.
  3. Waiving of certain rights: Some severance agreements may request that you waive your right to certain legal rights, such as being able to file a discrimination claim or some type of lawsuit against your employer. This is a provision to take a close look at, especially if you believe that you may have been wrongfully terminated. This type of provision can make it extremely difficult, if not impossible, to file any potential future legal claims.

These are just a few provisions that a severance agreement may include that could be hidden dangers. Waiving certain legal rights, such as filing a lawsuit, or a strict clause that can impact your ability to find future work in your field should be taken into serious consideration.

Severance agreements are binding, legal contracts, so it is important to ensure that you understand the terms of the agreement prior to signing it.

Should You Try and Negotiate a Severance Package?

Yes! We recommend negotiating a severance package whenever it is offered. They are legal documents that lay out critical details about your termination, such as benefits, and severance pay. Negotiating serves two key purposes:

  • Giving you and your employment attorney plenty of time to fully understand the details of the agreement.
  • Allowing you to negotiate for an agreement that is as beneficial to you as possible.

How Do You Negotiate a Severance Package?

Be sure not to sign the severance agreement right away. You should take time away from your employer and the initial offer to look over the agreement carefully. Be sure to read through the agreement carefully, making note of any areas of concern.

Next, consult with an employment lawyer. An experienced employment lawyer will be able to bring expert legal insight to the table as they review your agreement thoroughly. We can help to ensure you understand the agreement and what exactly you will be receiving and potentially giving up.

From there, an employment lawyer will be able to help negotiate the terms of the severance agreement – everything from the offered amount of severance pay to noncompete clauses.

How Do You Argue for Severance?

It is not uncommon for employees to be interested in negotiating a severance agreement. Approaching your employer with a clear understanding of your points of negotiation in mind and knowing your rights as an employee are two ways to argue for severance.

Go in with as clear a head as possible, whether you are arguing for severance before you begin a new job or if you have recently been laid off and are being offered severance. Arguing for severance will include:

  • Considering working with an employment lawyer for your negotiation.
  • Discussing what the company’s current severance package offer is.
  • Understanding if there is room for negotiation.
  • Staying on top of what the employer’s current workplace policies are.

Contact a Severance Package Law Firm for Assistance

If you have been offered a severance package, we highly recommend consulting with a severance package negotiation lawyer. At The Friedmann Firm, our team of lawyers can help you negotiate a severance agreement and work to secure the best offer possible.

Contact us over the phone at 614-610-9755 or by reaching out online to schedule a free and confidential consultation.