When an employer decides to downsize, reduce or eliminate a department or discharge employees for other reasons, severance agreements may be necessary. At the very least, a severance agreement would be a smart option for the employer to minimize the risk of potential lawsuits.
What is a Severance Agreement?
A severance agreement is a contract between you and your employer that spells out the terms of your termination, should it occur. It is also sometimes called a “separation agreement” or a “termination agreement.” The legal contract typically offers you money and/or benefits when you are being discharged in exchange for a release of liability for claims you might otherwise make against your employer. For example, you may agree to giving up your right to file any types of claims against your employer, such as discrimination, harassment or retaliation, once you are terminated. In order to be a legally binding contract this agreement must offer you something you are not already entitled to, such your pension benefit or vacation time. Instead, it must offer you additional compensation as a consideration for the rights you are giving up.
Should I Sign a Severance Agreement?
If you are asked to sign a severance agreement, it is important that you read it thoroughly and completely understand what rights you are waiving before signing. There are important details that you should watch out for. In addition to releasing your employer of potential liability, many severance agreements include clauses that restrict your actions after you have left the company’s employment. These may include a new non-compete agreement, affirmation of an existing non-compete agreement, or a confidentiality clause. Bear in mind, these restrictions could have a detrimental impact on your ability to secure new employment in your field.
To protect your rights, it’s a good idea to have a knowledgeable employment lawyer, like those at Castronovo & McKinney, review your severance agreement before signing it. If you have a valid claim against your employer for discrimination, unlawful termination, retaliation, or any other legally valid issue, you should retain legal counsel before giving up your lawful right to pursue one of these claims. Additionally, our attorneys can assess whether the contract that you are offered is fair and reasonable, and if not, help you negotiate one that is.
The New Jersey employment law attorneys at Castronovo & McKinney will work with you to ensure that you understand all of the proposed terms of your severance agreement. Our lawyers will determine whether you are giving up any valid claims, analyze the terms and clauses your employer presents in the contract and help you decide on the most effective course to negotiate a fair and reasonable deal.
We offer flat-fee based services including:
We can provide a comprehensive review and analysis of your severance agreement and package. We will outline anything included or excluded that should be aware of and provide you with the necessary language to make potential changes. We also explore your specific case to see if your termination could lead to a potential claim. We do these reviews based on a flat-rate fee to minimize an unexpected hourly rate review.
In addition to our review process our team of severance lawyers can also take your negotiation forward with your former or potential employer. With experience in negotiation our team can provide careful and professional services on your behalf. This service is typically offered as a blended rate.
Severance pay is often a huge factor when being terminated. Our team has experiences with the nuances of New Jersey laws and the language most often used in these types of agreements. Very often these agreements are taken without consideration and overlooking elements of these agreements can mean a large difference in compensation.