I Have Been Asked to Sign a Severance Agreement, What Should I Review in that Document?
You should review everything if you receive a severance agreement, and you should not assume that it is just “boilerplate” language that is the same in every severance agreement. It is important to understand that your employer is not offering you a severance agreement (and the severance pay provided) because your employer feels bad about letting you go (even if that is the case). The real reason for the severance pay is because, to receive it, your employer wants you to “release” the employer from all claims you may have against the employer for anything that occurred during the time you worked at your job.
What is a Release?
A release describes the language the employer relies upon to confirm that you have no claims against your employer. Once you sign a release and accept the money from your employer, you usually have agreed that you will not sue your employer for anything that happened, including, for discrimination or unpaid regular or overtime wages. Another thing to review is whether the release is one-sided or two-sided (where the latter is known as “mutual”).
Are There Things I Should Be Particularly Concerned About in the Severance Agreement?
While you should be aware of and understand everything you sign, in addition to the release itself, you need to be careful about what types of limitations may be placed on you after you leave your most recent employment. Some agreements can limit the types of companies you work for, especially those that might be considered in competition with your most recent employer. Also, there may be prohibitions upon soliciting company clients. Another concern is what you can and cannot say about the settlement and your employer.
There are many other provisions—too lengthy to include here—that an employer may include in a severance agreement.
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We Review Severance Agreements for a flat fee, and negotiate them on a contingency fee basis.
If you would like to discuss your situation with us, including whether you should sign an agreement with such a provision, please feel free to call or email us at any time. You will be on the phone with an attorney within 24 hours.