Losing a job is a stressful experience. Severance agreements can provide benefits that help ease the transition to your next job. But don’t let your employer make matters worse by pressuring you to sign a severance agreement that unfairly restricts your rights.
While employers are generally not required to offer severance agreements to terminated employees, many employers do. Because severance agreements can provide you with financial and non-monetary benefits, it is often a good idea to explore with your employer whether a severance agreement might be available in your situation.
Depending on the circumstances, the benefits provided to employees in severance agreements may include monetary payments, assistance with covering COBRA health insurance premiums, job search assistance, and positive job references.
If your employer offers you a severance agreement, in exchange for the benefits to you, your employer will likely require you to waive all legal claims you may have against it — including claims you may not know about.
If you have been terminated and offered a severance agreement, it is important to learn exactly what you are giving up by waiving all potential legal claims. If you have viable legal claims, this might affect whether the amount offered is fair to you.
Legal assistance can also be useful in dealing with other severance issues. For instance, if you have an employment contract that entitles you to severance pay, or advance notice of a termination, it is important to ensure your employer fully complies with those provisions. Or, as part of a severance agreement, an employer may try to get you to sign a non-compete agreement that restricts your ability to make a living in your field. An employer may even try to include language in the agreement that reduces compensation you are already legally entitled to receive.