Top Ten Severance Agreement Don’ts
Nov 1, 2013
A Severance Agreement is usually drafted in the company’s favor. The agreements and releases in it are not typically for the benefit of both sides. What are some of the mistakes employees often make when handed an agreement? Here are the top ten severance don’ts:
1. Do not sign an agreement without fully understanding it. It is a contract. It can affect your employment, sometimes for several years into the future.
2. In most cases, you need time to read the severance agreement and understand it. Most agreements are several pages long. They have been written by a lawyer. Reading the agreement when it is handed to you and signing it moments later when you are stressed about losing your job may not be in your interest.
3. Understand how the agreement affects your unemployment benefits before you sign it. Many severance agreements say that you resigned your job. Don’t sign an agreement without understanding how it may affect unemployment benefits.
4. Don’t ignore money (bonuses, stock options, deferred compensation and the like) you may be leaving on the table by signing. Know under what circumstances it would be reasonable to make a request.
5. The language of the severance agreement is very important. Most of the agreements are heavily-lawyered. In order to level the playing field, you may need a lawyer to request revisions.
6. Severance agreements contain releases of claims. This means that by signing, you are giving up any right to sue the company. These releases are usually extremely broad. Don’t forget that you may have legal claims. Understand what claims you may have. Understand what claims you may be giving up.
7. Don’t simply ignore non-compete, non-solicitation and other restrictions in your agreement. Don’t just hope for the best. Know the impact of these restrictions on your future employment.
8. Don’t forget that severance isn’t the only form of valuable compensation. Know whether you can add to the package.
9. Don’t delay in seeking advice. If you wait, you may lose your rights.
10. There are various ways in which severance payments can be structured and/or paid out. Don’t assume that this can’t be negotiated.
If you need help in negotiating your agreement, please call Boston employment attorney Maura Greene. at 617-936-1580. Maura Greene was listed in the Boston Globe in 2012 as one of Boston’s top-rated employment attorneys. She has been named a Super Lawyer in the area of employment.