These agreements often contain substantial volumes of “legalese”. Since employees may be giving up valuable rights by signing a severance agreement, asking an employment lawyer to review the proposed agreement, and perhaps to negotiate changes, is always wise.
Areas of expertise
How We Can Help
When an employer offers you a severance package or separation agreement, they are essentially saying to you, “Your employment is terminated, but we are willing to offer you money and other benefits, in exchange for the surrender of your legal rights and other terms we deem to be in our best interest.” The agreements are usually prepared by the employer’s attorneys and, predictably, drafted in a manner that is favorable to them. Therefore, it’s critical to carefully consider the legal and practical implications of each term of the severance or separation agreement before signing and/or obtain competent legal advice. In many cases, the agreements actually contain language that specifically instructs the employee to seek legal counsel before signing the agreement. Such language may be a key indicator that the agreement is drafted in a manner that is favorable to the employer, and not to you.
Though losing a job is never easy, what ultimately matters most, is how well you handle it. Our law firm believes that the best way to assist a client who has been handed a severance or separation agreement is to carefully evaluate the “hand you are dealt”, and make sure it is played in the best manner possible legally and professionally. We make every effort to advise and/or negotiate on behalf of our clients in a manner designed to obtain maximum results without “burning any bridges” or involving the client in unnecessary legal disputes.
Where we Can Help
Typical Issues Our Attorneys will address with you
Depending on the circumstances, our attorneys will often negotiate, or assist our clients in negotiating with the employer to try to significantly increase the amount of severance pay, health insurance, and other benefits they receive. We may also negotiate for provisions which (1) purge the employee’s personnel file of any negative statements or warnings; (2) provide the employee with a positive letter of recommendation; (3) eliminate or reduce any restrictions on the employee’s right to compete or solicit customers; (4) forgive any debts owed to the employer; (5) reduce or limit the tax consequences associated with the agreement; (6) obtain a lump sum pay out; and (7) obtain the employers cooperation with respect to the employee’s claim for unemployment insurance benefits.
There are no set “rules of thumb” regarding how much severance pay and other benefits an employee is entitled to. The process typically involves the weighing of legal and non-legal parameters and application of sharp negotiation skills and many years of experience. The factors which typically tend to favor a positive resolution include the following: Employee loyalty and years of service; positive achievements; a good record of performance or concern that the employee may compete and/or convey information or opinions that are not favorable to the employer; extenuating circumstances that may justify additional pay or benefits; and the strength or weakness of the employee’s potential legal claims. Keep in mind, one of the primary things the employer is “buying” in a severance package is peace, confidentiality and freedom from any future lawsuits. It is therefore important for you and your attorneys to gauge the specific value of the rights you are surrendering, so as to pursue the appropriate monetary amount and ultimate “end game” in negotiation.
For example, an employee with 25 years of service, a strong legal claim for age, gender and/or disability discrimination worth $500,000, may not be well-advised to accept a severance package of $1,000. By the same token, an employee who has little or no legal case, and is offered a severance package at that value, may be well-advised to accept the offer. Each case is different. The strategy and outcome depend on the circumstances presented, and our attorneys will go the extra yard to make sure that your negotiation strategy is tailor-made to the specific situation you are facing.
Our law firm can also assist you in addressing important issues relating to COBRA health insurance continuation; life issuance portability; 401K rollover; pension payouts and procedures; payment of accrued vacation and expenses; matters relating to eligibility and application for unemployment insurance benefits; and related post-employment matters. Addressing these issues, early and effectively, increases the employee’s likelihood of a smooth transition, without any adverse legal or financial consequences.
The attorney’s fees and/or costs clients typically incur in connection with severance package/separation agreements tend to be minimal, compared to the fees and costs associated with litigation, and other services typically provided by employment law attorneys. Most cases involve a short period of review and focused advice. In our view, the key focus for people facing a separation from employment is to do it right the first time, obtain the best outcome possible, and then promptly move on with your lives.
We have found that employees often view the protection of their good name, reputation and livelihood to be as important, if not more important, than the monetary value of their severance package. We are often called upon by our clients to negotiate or take other appropriate steps to clear the client’s good name and employment record and/or obtain an acceptable employment reference, press release or letter of recommendation, moving forward. To that end, we will often work with the employer, or their attorneys, to negotiate for an appropriate statement, or “script”, that will be used in responding to any inquiries from prospective employers, business contacts, and other third parties.
In an era where employers have been placing more emphasis on background and reference checks, and where the internet has become a tool for widespread public disclosures, non-disparagement provisions and publicity causes have become critically important matters for discussion, negotiation, and/or modification in separation agreements.
As noted, severance agreements are typically drafted by employers/their attorneys and, as a result, will tend to contain language that is favorable to the employer. They often contain “release of claims” clauses that eliminate or restrict an employee’s right to sue the employer for wrongful termination, discrimination, lost wages, a defamatory employment reference or other damages; non-compete/non-solicitation provisions or confidentiality clauses that restrict an employee’s right to work in a competing business and/or use certain information they may have acquired on the job; non-disparagement or publicity clauses that restrict what the employee may say or do, post-employment; and provisions requiring the payment of the employer’s legal fees, and/or (liquidated) damages, if the agreement is breached. It is therefore important that the document be carefully analyzed to determine whether or not there is any illegal, detrimental, vague or inconsistent language, or provisions that may call into question the enforceability of the document. If these problems arise, alternative language should be thoroughly discussed, proposed and/or negotiated.
plan of action
Our Firm’s approach is aggressive but practical. Our attorneys are available to directly address your concerns, and put our many years of experience to work for you. Though the events and “drama” that arise in the workplace can often be confusing and emotionally taxing, our legal team deals with these matters on a daily basis. We can therefore provide you with a level head, as well as a well-rounded approach.
We quickly identify the root of the specific problem you are facing at work.
We explain clearly where you stand with respect to your legal rights.
We disclose your options and likelihoods for obtaining a favorable outcome.
We Will Help You Every Step Of The Way
We plead that good legal service starts by alleviating the “ulcer” that comes from not knowing your legal rights, and replacing that with a definitive, smart and practical strategy, moving forward.