What Is A Severance Agreement?
A Severance Agreement is a document an employer asks some employees to sign after they have been fired, laid off or otherwise terminated. It offers the employee some “severance pay” to help employees who have lost their jobs. Policies and practices vary greatly from one employer to the next, but most employers pay severance only to employees who have lost their jobs because their position was eliminated or who were laid off as part of a mass layoff or reduction in force. In some workplaces, certain employees also are eligible to receive severance when they retire. Generally speaking, an employee who has been terminated for misconduct or poor job performance may not be entitled to Severance Pay.
Am I Entitled to Severance Pay, and If So, How Much?
Employers are usually not required to have severance plans. However, if an employer does have a policy, it must pay any employee who meets its requirements. Often, this can include having worked for a company for at least a particular number of years and losing your job through no fault of your own. It also can include many other requirements such as staying with the company through a transition period (e.g., until a merger has been completed) or until you have finished training your replacement. Generally, an employee would have to sign a waiver, agreeing to give up all rights to bring a lawsuit against the employer.
Some employees, especially high ranking ones, have negotiated contracts prior to beginning employment that sets forth their rights upon separation from an employer. The amount of severance pay you may be entitled to will differ by employer. Usually the employer considers the length of employment with the company.
Have an Employment Lawyer Review Your Severance Package
Severance Agreements almost always require you to sign away important legal rights before you can receive payments. As a result, before you decide whether to accept an offer, it is important to have an experienced employment lawyer review it and to make sure you completely understand it.
Additionally, some employees signed confidentiality agreements, non-competition agreements, and non-solicitation agreements. You and your attorney should review all contracts that you have signed prior to and during your employment to determine what your obligations are to your company upon separation.
Gebhardt & Kiefer can review the severance agreement as well as other contracts, agreements and policies that may apply, and provide you with advice regarding your severance agreement. We can also provide assistance in attempting to negotiate a better severance package.
For more information or to set up an employment law consultation with a lawyer at Gebhardt & Kiefer, P.C., call 908-735-5161,or send us an e-mail. Our firm serves clients throughout central and northwestern New Jersey.