Severance and Non- Compete Agreements

Perhaps you see the writing on the wall – layoffs are coming and you want to be prepared.  This advanced preparation can help temper the emotional shock of a layoff.  Typically when a company must downsize their employee pool through layoffs, they offer severance packages.  A severance package is a negotiation between an employer and an employee, which offers financial terms such as cash payouts and continued benefits when an employee leaves the company.  Often, severance agreements contain clauses where you waive your right to sue the employer for wrongful termination, discrimination, harrasssment or wage violations.

Our Boston-based boutique law firm has an experienced team of attorneys who are well-versed in the laws surrounding severance packages.  Some of the common severance package disputes include:

• Discrimination (age, sex, race, nationality, sexual orientation, etc)
• Potential fraud / misrepresentation in the way the package was negotiated – for example, you were tricked into signing a different agreement than the original
• The terms of the package
• Non-payment of severance, or withholding payment

It is important to note that courts usually uphold severance agreements, as they are mutually undertaken, with each party agreeing to uphold their end of the agreement.  So what can you do to avoid filing a severance package lawsuit?

1. Never sign a severance agreement until you have read it.
2. Thoroughly read the entire package, making note of terminology or unclear language. Keep in mind that under federal age discrimination laws, it is now routine in most companies to allow workers 21 days to review their severance packages.
3.  It may seem unimportant, but having an attorney review your severance package is critical in ensuring that the terms of the agreement are in your favor.  At Cohen & Lucyniak, we invest the time to review each clause of your package with you, enabling you to digest the terms of the entire package before you sign on the dotted line.  Besides the value of the package, our attorneys also look for certain clauses that should be included:
   • Payout for unused vacation or unreimbursed expenses
   • A thorough explanation of benefits you will receive upon separation, such as continuation of health care / COBRA
   • A mutual release of claim, which ensures neither you nor your employer can make further legal claims against one another.  This includes legally blocking your employer from making disparaging comments about you to other employees, company executives or future employers
4. Negotiate for a better deal before you sign.  This is where utilizing our Employment Law experts is important.  A typical severance payout is 1-2 weeks of pay for every year you’ve been employed by the company, but an experienced Employment Law attorney can often increase your severance.  Other areas of negotiation centers around continuing your health benefits and any retirement plans or stock options.  Never accept a severance package without reviewing it with an experienced Employment Lawyer, they can almost certainly get you a better result from you employer.

Don’t let the intricacies of a severance package add to the stress of a layoff.  We are here to advocate and guide you to being confident when you sign your severance agreement.  Call us today!