Severance agreements are more than just a “thank you” payment from an employee
Companies aren’t required to offer severance agreements, but those that do will have different sets of policies and guidelines for how severance is handled.
If you need help interpreting, negotiating, or pursuing an employment or severance agreement, our team can help.
Getting laid off or fired from your position is an unfortunate situation, and many people experience a range of emotions when their employer notifies them of their termination. It’s not a requirement for a business to provide a severance agreement, but many companies offer these contracts to help you until you find a new place to work. However, severance agreements are just as beneficial for the employer, and you may be signing away crucial rights in exchange for less than you deserve.
Our employment law attorneys at Crone Law Firm are passionate about helping employees through challenging situations, including negotiating severance agreements. We have decades of experience and have developed unique philosophies and techniques for these cases. Our proven team approach can help you reach the best severance agreement possible for your circumstances.
What Is a Severance Agreement?
A severance agreement is a contract used upon termination from a job between the employer and employee, and it’s a voluntary agreement that you do not have to sign. The best time to know your rights and leverage your bargaining power is BEFORE you sign an agreement, NOT afterward.
Severance agreements go over the benefits, pay, and other terms you receive or agree to after vacating your current position. Employers typically offer one to two weeks’ pay for each year of your employment. For example, a ten-year employee would receive 10 to 20 weeks of severance pay. However, sometimes our attorneys can negotiate up to three or four weeks’ salary for each year you’ve worked there. This payout is due to the challenging nature of specific job markets, as it will likely be difficult to find another position at the same salary or wage. This amount may be paid as a lump sum or spread over time.
In addition to the terms of pay, severance agreements outline provisions to protect their best interests. In signing this contract, you forfeit your right to file a lawsuit against your now-former employer for illegal actions, such as sexual harassment and wrongful termination.
Severance agreements often include non-compete clauses that prevent you from taking another job or starting a company that is a direct competitor or deals with the same clientele. There may also be clauses that prohibit you from talking about your severance package or discussing any details pertaining to the company. This aspect is where negotiations can be especially vital.
While signing a severance agreement may seem beneficial at the time, it’s critical to have an employment attorney look over the contract before you add your signature.
Negotiating Your Severance Agreement
All contracts are negotiable, and our attorneys have vast experience in this arena and understand how Tennessee and Missouri laws may apply to your severance agreement. Not only can we negotiate the amount of severance pay you receive, but we can also pursue these changes and more:
- Health, Life, and Disability Insurance: Under COBRA (Consolidated Omnibus Budget Reconciliation Act), you have a right to continued coverage under the group health insurance plan through your employer. Typically, employees must pay the same premiums to keep their insurance. Still, we may be able to negotiate a change in which the employer pays for COBRA coverage, including disability and life insurance premiums, until you can afford them when you find new work.
- Non-Compete Clauses: Our attorneys will review your severance agreement with a fine-toothed comb. Non-compete clauses are often included in the terms, but they mustn’t limit your job opportunities as you search for new employment. We can negotiate these terms to ensure you can work in the same or related industry and are not unreasonably limited in your associations with clients and customers.
Part of these negotiations is ensuring you are adequately compensated for forfeiting certain rights to make up for possible losses. You don’t want to leave money on the table or waive your rights unnecessarily.
The Crone Law Firm Can Help
Our experienced employment law attorneys will review your severance agreement to make sure the contract benefits you, not your former employer. In states like Tennessee and Missouri, most employees are considered “at-will” which means they can be fired for any reason at any time. Also, most employees receive no additional compensation when they are terminated. Let us negotiate a release of claims, a non-competition or non-solicitation clause, trade secret confidentiality, or other terms your employer may request, to ensure you receive severance or separation pay in return.
If you are negotiating a new employment contract or the end of your current job and want more information about a severance agreement, we have the answers you need.
Our lawyers can help you interpret, negotiate, and pursue claims under employment agreements and severance agreements. In any event you should fully understand them before you sign them.
Contact Our Employment Law Attorneys Today
If the other side does not live up to its obligations under such an agreement, our lawyers can represent you to pursue your benefits and protect your rights. Call us today at 901-737-7740 or contact us online when you want to put us to work for you.
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