Severance and Separation Agreements
You’ve worked for your employer for a number of years. You start to hear the rumor mill swirl with talks of termination and cutbacks. Or maybe you are the target of retaliation and know your days are numbered. If your employer hands you a long legal document that you don’t fully understand, what should you do?
Separation and severance agreements are one of the most powerful employment agreements in existence, primarily because they contain provisions that require employees to waive powerful and important rights. We’ve answered the most common questions below relative to severance and separation agreements. If after reviewing them you still have questions, contact Steffans Legal. At a minimum, we suggest you have an attorney review the document and give you suggestions on how to protect your rights.
Frequently Asked Questions Regarding Severance and Separation Agreements
What is this document? You’ve likely been handed a document known as a separation or severance agreement. It’s something employers like to get employees to sign when their employment ends. Not surprisingly, it’s designed to benefit your employer: not you.
What does it mean? If you sign it, it means, generally, that you are releasing all claims you may have against your employer and promising not to file suit. You may not have grounds for a suit, but you might. Giving up a right to sue is a pretty significant thing and something you should think about, and talk to an attorney about, before signing.
Am I automatically entitled to severance? No. It’s a benefit offered by some employers, but not required.
But I’ve been there forever, that’s not fair! Agreed. But there is no law requiring severance be paid.
My employer is offering a small amount, should I negotiate? Can’t hurt. But the trickier question is what should you be asking for? There are many things to ask for as part of the severance negotiation process, including (1) increased monetary payments, (2) continued health insurance benefits, (3) letters of recommendation, and (4) agreement not to challenge unemployment.
I want to negotiate. What should I ask for? That depends on your specific situation and the nature of your separation. If you have a viable claim for harassment, discrimination, or unpaid wages, you should definitely consider asking for more compensation. If you don’t, maybe not.
What should I do? You should set up a free consulting by clicking that little gold button to your right. The one that says "Contact Us." Extinguishing important legal rights is not something you should do without fully understanding the implications and, more importantly, whether there is an opportunity to negotiate a more favorable separation package. The only way to understand the strength of your leverage is to speak to an attorney and explain the nature of your employment and the circumstances surrounding your separation. It could very well be that your termination violates an important employment law, or that you are owed a considerable amount of wages from your employer. Once you sign that separation agreement, those rights are gone forever.