Employment Contracts & Severance

Laws passed by the legislature are only one source of employee rights. In addition to those laws, employers may make written or oral promises to employees. These promises often deal with compensation, benefits, and other terms and conditions of employment. These promises can occur in formal agreements, compensation plans, or employment handbooks, or in less formal circumstances like emails, letters, or conversations. Regardless of the format or medium, promises can create contracts. And employers are required to honor the contractual promises they make to employees. 

At the end of the employment relationship, employers sometimes ask employees to sign severance agreements. In severance agreements, the employee typically makes promises to the employer and gives up legal rights, including legal rights the employee may not know about, in exchange for a monetary payment or other benefits. Severance agreements typically require the employee to waive all potential legal claims against the employer, including claims the employee may not be aware of, so it is important to understand your rights and potential claims before deciding whether to sign a severance agreement.