Before You Sign that Severance Agreement!
Nov 9, 2011
Before you sign that severance agreement in Massachusetts, consider whether there are documents that may have an impact on it. A severance agreement is a contract and employees should know the legal impact of the document before they sign it, even if it offers substantial severance pay. Here are a few of the documents you will need to gather and consider before you sign that severance agreement:
- Any employment agreement you signed
- The offer letter from the company
- Any and all signed non-compete agreements
- Any non-solicitation agreement
- Any confidentiality, trade secrets or non-disclosure agreement
- Agreements or schedules pertaining to commissions and bonuses and other incentive compensation
- Schedules for any vesting of stock options
- Employee handbook
- Life insurance policies
- Any company policy on severance payments
Depending upon your own individual circumstances and the reasons for the separation from the company, any of these documents may become important in terms of understanding a severance agreement that is presented to you. Before you sign a severance agreement, make sure that you understand all of the “legalese” in it, and that you understand the impact of any documents you may have signed on the provisions of the agreement.
You should also understand how any incentive compensation, deferred compensation or fringe benefits impact on a severance agreement. Severance agreements are typically drafted first from a company perspective and the company may seek to enforce certain restrictive agreements and ignore other benefits for the employee. While many employees become anxious when presented with a severance agreement, the document is a contract and should be carefully considered before it is executed.
For any questions concerning the information in this post, please contact Boston, Massachusetts employment lawyer, Maura Greene at 617-936-1580.