Category: Employment Law Posted on Sep 05, 2022

7 Reasons to Review Your Severance Package with a Lawyer

Reasons to Review Severance Package with Lawyer

With the economy in flux, employees are losing their jobs.

Employers sometimes offer severance agreements when an employee is laid off or fired. A severance agreement is a contract between a former employee and an employer. A severance agreement often contains legal jargon that you may not understand.

Although you may feel pressured to sign it immediately, you have the right to have an attorney engage in a severance package review. 

Reasons to Review Your Severance Package with a Lawyer

A former employee would benefit from a severance package review by an attorney for several reasons, including the following.

1. The Severance Amount 

Your soon-to-be-former employer may offer a severance package with a one-time payment. A company drafts a severance agreement with terms in its favor.

Depending on the terms they want you to agree to, they may be willing to increase the severance amount in exchange for your signature. An attorney can help you negotiate severance payments. They can also help with countering a severance package. 

2. Release and Waiver of Rights

Typically, your employer requires you to waive your rights to sue them and release them of any liability in a severance agreement. Perhaps you have claims of discrimination, retaliation, or something else.

A waiver and release would limit your ability to pursue these claims. An employment attorney will be able to advise you of your rights. They can also help you decide when not to sign a severance agreement.

3. Employees over 40

If you are over 40, you have special protections under the Age Discrimination in Employment Act (ADEA). Under the ADEA, you are entitled to 21 days to consider a severance agreement. The agreement must state that you can consult an attorney for the termination agreement review. After you sign, you can still revoke up to seven days later. 

If you are over 40 and your employer pressures you to sign a severance agreement too quickly, an attorney can advise you of your rights and claims under the ADEA.

4. Non-Disparagement Clause and References

Employers often include non-disparagement clauses in separation agreements. A non-disparagement clause states that the employee cannot say anything negative about the employer. This includes statements on social media. 

An attorney may help negotiate a mutual non-disparagement clause so the employer cannot say anything negative about you. You can also try to limit what your former employer can tell a prospective employer to information about your employment dates, salary, and position. 

5. Non-Compete Clause

Your employer may include a non-compete clause in the severance agreement stating that you will not work for its competitors. A non-compete clause limits your ability to seek work. An attorney can provide you with advice on the requirements of non-compete agreements. 

6. Benefits Upon Termination

A severance agreement may also state whether you have any continued benefits, including health insurance coverage.

Although you are entitled to continued health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), the cost of this comes out of your pocket. You may speak with an attorney to negotiate an extension of your employer-paid health insurance. 

7. Unpaid Wages

Your employer may say they will not pay the wages you earned unless you sign the severance agreement. It is illegal for an employer to withhold earned wages even after you’ve been fired. Consulting with an employment attorney will help you protect your rights to your unpaid wages.

Our Experienced Attorneys Can Review Your Severance Package

At StrangerLaw LLC, we have decades of experience in employment law. We can review and negotiate severance agreements. If you would like an experienced attorney to help with your severance negotiation, do not hesitate to contact our legal team by sending an online message or calling (860) 561-0651 today.

Bruce Stanger

My litigation experience includes family law, divorce, product liability, construction law, professional negligence, shareholder disputes, legal malpractice, and general commercial litigation.