Providing trusted legal counsel for credit unions, banks, businesses and individuals in the Tri-state area since 1989.

5 Things To Consider Before Signing A Severance Agreement

| Oct 12, 2017 | blog |

A severance agreement is a document that specifies certain terms and conditions for a leaving employee. It is in the best interests of both parties to ensure this document is clear, well-written and decisive. Before signing the agreement, however, there are a few things that an employee should pay specific attention to.

Unless you have signed an employment contract that clearly stipulates a severance agreement, in all likelihood your employer does not need to provide this separation document. Before you sign the document, however, there are five things you should keep in mind.

  • Identify any deadlines and act accordingly: It is not uncommon for an employer to specify a certain deadline for completion, but if you feel unnecessarily rushed, you might want to discuss the document with an attorney. Under certain conditions, an accelerated time line might violate a federal law.
  • Understand what you’re giving up in signing the agreement: In most situations, signing the agreement means just that – you agree with the terms of the document. You’ll likely be giving up your right to pursue a legal claim or renegotiate certain terms.
  • Realize that the terms of your severance agreement are likely negotiable: Following the previous item … if there are terms of the agreement that you do not find tenable, it is certainly wise to explore your options. Either working with your employer to find a better compromise or taking the document to an attorney might be a better option than simply signing.
  • Review the language of the agreement to identify penalties: For any business, a breach of contract represents a significant dispute and possible legal claim. Before signing the severance agreement, it is crucial that you clearly understand the terms, what constitutes a broken agreement and what consequences – financial or otherwise – await you if you violate the terms.
  • Begin following the confidentiality terms immediately: Similar to the previous item, most severance agreements will contain elements of confidentiality in that the terms of the agreement cannot be discussed with anyone outside of the organization. A breach of confidentiality might be triggered even if you make an offhand comment on social media.

There are a limited number of circumstances that dictate an employer must offer a severance package. If an employer chooses to offer an employee severance, it is critical that both parties protect themselves by using a well-written, comprehensive severance agreement. If you are concerned about your rights before signing the document, discuss your options with an employment law attorney.