Leaving a job can be a challenging and emotional process, especially if you have been there for quite some time. Whether you’re departing on amicable terms or facing an involuntary separation, it’s crucial to understand the ins and outs of your severance agreement. A severance agreement is a legally binding document that outlines the terms and conditions under which an employee will be compensated after their employment ends. In this blog post, we will delve into some of the essential provisions to look out for in a severance agreement.
Financial Compensation
The most prominent aspect of a severance agreement is often the financial package. This includes details about the amount of severance pay, how it will be disbursed (lump sum or structured payments), and any additional benefits like accrued vacation pay or bonuses. Ensure that you thoroughly understand the financial aspect of your agreement, as it can have a significant impact on your financial stability during the transition period.
Release of Claims
One critical provision in any severance agreement is the release of claims. This clause typically stipulates that in exchange for the severance package, the departing employee agrees not to sue the company for any employment-related claims. Be sure to review this section carefully to understand the scope of claims you are waiving and consult with legal counsel if needed. It’s important to understand what claims you are waiving, especially if you believe that you do have a claim against the company that you might consider pursuing.
Confidentiality
In the past, many severance agreements contain provisions that prohibit both parties from making negative statements about each other. In some states now, however, a non-disparagement clause is not permitted between an employer and employee. It’s important to consult with an attorney on this issue if you are presented with a severance agreement that contains a non-disparagement clause. A confidentiality clauses, however, is most likely permitted and may restrict you from disclosing sensitive company information. It’s vital to understand your obligations in these areas to avoid potential legal consequences.
Non-Compete and Non-Solicitation
Some employers include non-compete and non-solicitation clauses in severance agreements. These provisions may restrict your ability to work for a competitor or solicit clients or employees from your former company for a specified period. Be cautious about the scope and duration of these restrictions and consider negotiating for more favorable terms if necessary.
Return of Company Property
The agreement may require you to return any company-owned property, including laptops, phones, access cards, and confidential documents. Ensure that you comply with these terms to avoid complications and maintain a positive relationship with your former employer.
Governing Law and Jurisdiction
Take note of the governing law and jurisdiction specified in the agreement. This determines which state’s laws will apply if any disputes arise. Understanding this provision is crucial if you ever need to enforce or contest the agreement in court.
Conclusion
Navigating a severance agreement can be complex and overwhelming, but understanding its key provisions is essential to protect your interests during this transition period. Seek legal advice if you have any doubts or concerns about the terms and conditions presented in your severance agreement. Remember that you have the right to negotiate and, if necessary, modify the agreement to better align with your needs and goals.
Disclaimer: The information contained in this post is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls and communications. Contacting us, however, does not create an attorney-client relationship.
