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Why You Should Not Sign That Severance Agreement Yet

When terminating an employee, certain employers may provide their employee with a severance agreement. These agreements typically provide for some amount of compensation in exchange for a complete release of all claims the employee may have against the employer.

An employee then has a very limited amount of time to decide whether to sign the severance agreement. Because your rights are at issue, it is important to have the proposed severance agreement reviewed by an attorney as soon as possible. At Licata & Yeremenko, our experienced employment attorneys can review the severance agreement and provide you with proper guidance as to this important decision.

What Does A Typical Severance Agreement Look Like?

Unless required by an employment contract or company policy, employers are not obligated to offer terminated employees any sort of severance package. However, in order to incentivize the employee to release the company of any and all liability, many employers offer certain benefits to the employee in exchange for the execution of the severance agreement.

Some of the most common types of benefits included in a typical severance agreement may include:

  • Financial compensation, whether in a lump sum payment or in the form of a salary continuation for a particular period of time
  • The extension of health and/or other insurance benefits past the date of the termination
  • A promise to assist the terminated employee in their job search efforts (i.e., letter of recommendation/references, job training, etc.)
  • A neutral employment reference
  • Other employer-specific benefits.

In exchange for providing the aforementioned benefits, the employer typically requires the employee to release the employer from any and all liability related to their employment. Usually, the severance agreement will include an extensive list of statutes and/or potential claims that the employee is waiving, in addition to catch-all release language. Accordingly, if an employee signs the severance agreement, they would largely be precluded from bringing a future lawsuit against the company relating to their employment or termination.

Consult With An Attorney When Presented With A Severance Agreement

When offering a severance package to an employee, the company is typically doing so to protect its own interests. Accordingly, the severance agreement will typically be written in a way that offers the maximum benefit to the employer at the expense of the employee. Our attorneys can, among other things:

  • Advise you on whether have valid claims against the employer that you would be waiving by signing the severance agreement
  • Advise you on whether the employer’s offer included in the severance agreement is fair under the circumstances
  • Negotiate more favorable terms in the severance agreement (i.e., increasing the amount of the severance payment) on your behalf
  • Assist you in obtaining compliance with the terms of the severance agreement (i.e., if the employer fails to pay the severance amount)

Get Help In Determining And Protecting Your Rights

Severance agreements are often presented when the employee is at their lowest and most desperate, and often contain unfair terms. It is, therefore, important to consult with an experienced attorney to make sure that you know what your rights are and how to protect them.

At Licata & Yeremenko, we are skilled, experienced, and well-practiced in employment law and can help and guide you when presented with a severance agreement. We understand and empathize with the difficulties that come with losing a job and can provide effective and aggressive legal representation while maintaining compassion for your situation. Our attorneys are ready to help you. If you need assistance with a severance agreement, or otherwise need guidance with anything relating to your employment, please click here to use our online contact form or call 818-783-5757 for a free consultation.