What Should I Look for in a Severance Agreement

The severance pay offered is usually one to two weeks for each year of work, but may be higher. If the job loss leads to economic hardship, discuss this with your (former) employer. The general practice is to try to get four weeks of severance pay for each year. Middle managers and executives usually receive a higher amount. For example, some executives may be paid for more than a year. While not mandatory, some employers may also offer other severance benefits such as work counseling or payment of cobra expenses as part of a comprehensive severance package. Many employees sign their departure agreements without even trying to fully understand their terms. Perhaps they are intimidated by the big paragraphs and the fine print. But if these employees sat down and took a minute to carefully read what they had to sign, they could learn a lot about what they get and what they give up.

At Jackson Spencer Law, our experienced labour rights lawyers offer free advice to advise you on your rights. There is no obligation or cost to know if your severance agreement was designed in favour of your employer. In this article, I discuss 16 key issues to consider in the context of negotiating a termination agreement, with a focus on senior management termination agreements. Departure agreements are binding contracts for the settlement of any dispute between the parties. It should be understood that the employee must choose his difficulties on these issues, because it is unlikely that he will prevail over all the issues. If you believe that you have strong labour rights claims against your employer and that severance pay depends on your compensation for those claims, you may be able to negotiate a higher severance pay to compensate you for alleged damages arising from these claims. Sometimes employers try to get the employee to have a non-compete clause that prevents the employee from working with a competitor for a period of time. This is obviously problematic for the employee and must be narrowly defined or there should be appropriate remuneration for the non-compete obligation. Some states, such as California, prohibit such non-compete obligations altogether, unless the non-compete obligation is negotiated as part of the sale of a business or involves confidential information. Even in states where a non-compete obligation is legal, they are generally limited to six months to one year and in their geographical scope. If they agree, the employee will usually ask that competitors be listed and limited to a few direct competitors.

The employer may also refuse to pay the full amount of severance pay. In these cases, the former employee can take legal action and request that the separation agreement be enforced and that full payment be made. Under Section 150 of Chapter 149 of the Massachusetts General Act, the employer can be held liable for the triple injury – three times what it owes. One of the best times to mitigate the decline in job loss is during the first interview for the position. Discuss whether the company offers severance pay and how it will be paid. Prepare for termination at all times by keeping a history of your accomplishments and achievements to support the negotiation process. Also, keep up to date with any updates to your employer`s workplace policies, particularly the severance agreement. More than 60% of people find their next job thanks to someone they know.

In difficult times, make sure people know you`re looking for new opportunities. As more and more employers reduce their budgets, they rely on employees to recommend candidates. Use your network to take advantage of these opportunities as soon as they arise. Employers generally want the terms of a severance package to remain confidential, especially if the employee receives special consideration. The employee generally accepts the obligation of confidentiality, with the following exceptions: (i) disclosures to family members; (ii) disclosures to the employee`s legal, accounting or financial advisor; (iii) disclosures to government or tax authorities; and (iv) disclosures arising out of any legal or arbitration proceedings arising out of the Separation Agreement. Sometimes it is desirable for the company and the dismissed employee to enter into a transitional consultative relationship after the end of the employment relationship. The company can leverage the employee`s expertise and institutional memory, while the employee may be able to generate additional revenue. The most important conditions of these transitional provisions are as follows: a company may be required to pay severance pay under the employee`s employment contract, under the Federal Warnings Act or its state equivalent, or in accordance with company policy. Even if the company is not required to pay severance pay, it often offers severance pay in exchange for various agreements of the dismissed employee, including an exemption from potential claims against the company (see below). A manager has the best chance of negotiating severance pay if the employee was dismissed without « reason » within the meaning of an employment contract. Do some research to find out what severance packages you can reasonably expect from your company, and then do your best to maximize them. Consulting an employment lawyer can also give them an idea of what was offered to others in your former company.

Remember, you have nothing to lose, and you`ll never know what you could get if you don`t ask. Just as a non-disparagement clause prevents the employee from defaming your company, a benchmark review clause can prevent the company from making a negative reference to future employers. Some employers agree to provide a positive reference under the agreement and may even provide the employee with a reference letter for approval. Learn how to negotiate appropriate severance pay, especially if you have an existing job. [+] Agreement. If your company grants stock options as a benefit, changing the exercise schedule so that the employee can repay could be a valuable severance package. In California, it is generally illegal for an employer to require an employee to sign a non-compete clause. A non-compete obligation, or also called a non-compete obligation, is an agreement that prohibits an employee from working with a competitor of his or her current employer […].