A severance agreement is a contract between an employer and an employee that outlines compensation and other terms following the end of employment. While it might seem like a straightforward exchange, severance agreements often contain complex terms that can have long-term consequences.
Signing without fully understanding what you are agreeing to can leave you with limited options down the road. Before you sign a severance agreement, it’s crucial to take a closer look and proceed with caution. Fortunately, your employment law attorney with The Samuel Law Firm can help you understand and protect your rights. Here is more about how severance agreements work and some of the most important things to keep in mind before you sign on the dotted line.
Common Reasons Not to Sign a Severance Agreement Immediately
It’s tempting to sign a severance agreement as soon as it’s offered, especially if you are feeling pressured or just want to move on. However, there are valid reasons to pause and evaluate the offer thoroughly, including:
Unclear Terms
Severance agreements often contain legal jargon and ambiguous phrasing that may obscure their full implications. If terms such as “general release” or “liability waiver” are not clearly defined, you might unknowingly forfeit significant rights. You might find yourself regretting your decision to sign a severance agreement if you rush into things without getting the clarification you need.
Unfair Offers
Some severance agreements may not offer fair compensation relative to your tenure, contributions, or industry standards. If the severance pay does not reflect your value or adequately cover the transition period while you find new employment, it’s worth questioning whether the offer aligns with your needs.
Waiving Rights
In exchange for severance pay, employers often require employees to waive certain rights, such as the ability to file lawsuits for discrimination or wrongful termination, which could violate federal law according to the National Labor Relations Board. While this might seem like a reasonable trade-off, you need to consider the implications. Are you comfortable potentially forfeiting legal recourse for an issue that could warrant further action?
Clauses to Watch Out For
When reviewing a severance agreement, specific clauses demand close attention. These provisions can significantly impact your future professional opportunities and personal freedom:
- Confidentiality clauses – While protecting company information is standard, some agreements overly restrict your ability to discuss your employment experience. This can feel unnecessarily limiting.
- Non-compete agreements – These clauses restrict your ability to work for competitors, or in your industry for a specific period. Your employment law attorney can ensure these terms are reasonable and will not jeopardize your career trajectory.
- Non-disparagement clauses – These terms prevent you from speaking negatively about your former employer, even if you have legitimate concerns.
- Reimbursement requirements – Some agreements include provisions requiring you to repay severance pay if you violate the terms, such as working for a competitor.
- Release of claims – This clause may waive your right to pursue legal action for discrimination, harassment, or other workplace violations.
Employee Rights and Negotiation Options
As an employee, you have rights even after your employer asks you to sign a severance agreement. It’s essential to understand these rights and consider your options for negotiating better terms.
- You can negotiate – A severance agreement is not a “take it or leave it” situation. You can negotiate for better terms, such as increased pay, extended benefits, or more favorable clause modifications.
- You don’t have to sign right away – Most agreements come with a deadline, but this doesn’t mean you need to rush. Under the Older Workers Benefit Protection Act (OWBPA), employees over 40 must be given at least 21 days to review the agreement and 7 days to revoke their acceptance.
- You still have rights – Certain rights cannot be waived, even if you sign. For example, employers cannot require you to waive rights to file complaints with government agencies like the Equal Employment Opportunity Commission (EEOC).
Common Concerns Surrounding Severance Agreements
Do I need to sign the severance agreement right away?
No. Take the time to review the agreement and seek legal advice before signing. Don’t let your employer pressure you into a decision you will regret.
Can I request changes to the severance agreement?
Yes, you can negotiate the terms of your severance agreement. While the employer isn’t obligated to agree, many are open to discussions to avoid disputes.
What happens if I don’t sign the severance agreement?
If you choose not to sign, you won’t receive the severance pay. However, you’ll retain your rights to pursue legal claims or other remedies.
Turn to a Dedicated Employment Law Attorney for Help Today
When presented with a severance agreement, your next steps are crucial. Every clause, term, and condition can impact your future, both professionally and personally. Taking the time to review the offer carefully, and consulting with a reputable wage and overtime attorney, can help ensure you make an informed decision.
Remember, you are not alone in this process. If you are unsure about the terms or feel the agreement is unfair, don’t hesitate to reach out to a top-rated New York employment law attorney. Our firm will provide the clarity, confidence, and advocacy you need to protect your interests. Fill out our secured contact form or call our office to schedule your free, no-obligation consultation as soon as today.
