Absolutely. A severance agreement is a legally binding agreement, and you should always seek legal counsel before signing one. Even if the agreement seems fine to you, there may be tricky clauses or bad provisions that work against you. It’s always a good idea to have a lawyer review your severance package. Here’s why.
Typically, severance agreements require you to waive and release all employment related claims you might have against the employer. What does that mean? Well, it means that you can’t sue the employer for anything that happened prior to the date you signed the agreement. The agreement may also limit any future claims to arbitration.
Sometimes, employers offer less money initially with the expectation that employees will negotiate up the severance amount. Other times, an employee has potential claims – like discrimination, wage payment or overtime issues, or disability accommodations, that can be used to leverage a higher payment.
Your severance agreement needs to explain what benefits you will receive after you leave the company. This includes health benefits, job placement assistance and more. Remember that everything in the agreement is negotiable, including continuing healthcare coverage.
Make sure that your severance agreement includes payment for all items your employer owes you. For example, if you are owed mileage, outstanding business expenses, or any other costs you incurred as a result of your job, the agreement should require the employer to fully reimburse you. It should also account for any unused vacation time.
Your employer will want to keep the information contained in your severance package confidential so that you can’t talk to other employees about it. If you break this confidentiality clause, you can forfeit your severance benefits.
Severance agreements often contain non-compete and non-solicit restrictions. These clauses prevent you from working certain jobs after you leave the company. They also prevent you from hiring other employees from the employer, sharing trade secrets, or using insider information to start your own business. These clauses can be tricky and hard to understand but the basics are that they can have a significant impact on your ability to find a new job. You should absolutely have an employment attorney review your severance agreements if it contains these clauses.
Often, the employer wants you to agree not to say bad things about them. Are they making the same promise back to you? Also, some laws prohibit restrictions on your ability to discuss wages or working conditions at your employer. A lawyer can help you review your rights.
If you are in need of an attorney’s advice, please contact Cook, Craig, and Francuzenko today. Our firm has attorneys who specialize in a variety of practice areas. With over 100 years of combined experience, we are seasoned professionals ready to help you.
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