The success of a company generally lies in the strength of its operational documents. These documents can range from vendor delivery agreements to various employee handbooks and contracts. A severance agreement is a document prepared by the employer that dictates certain terms and conditions regarding severance pay for a leaving employee. These documents must be carefully prepared, well-written and decisive. Often, however, there is room for negotiation.
When determining whether an employer is required to offer a severance package or not, various factors must be examined. The factors can include the length of time the worker was employed by the organization and if the business is closing due to the economic impact of a lengthy strike. If a severance package is offered, the employee is encouraged to review four critical elements prior to signing:
- Identify any deadlines and act accordingly: The severance agreement might contain language or various conditions that specify a deadline for completion. It is not uncommon for individuals to feel unnecessarily rushed by their employer in these situations. It might be wise to discuss this accelerated timeline with your chosen advocate to ensure its legality.
- Thoroughly examine the terms of the agreement: By signing the severance agreement, you are thus agreeing to the terms contained within. In many situations, you are voiding your right to renegotiate the terms at a later date. It is crucial that you fully understand the terms and negotiate when necessary.
- Identify and negotiate revisions to various penalties: The employer will first act to protect their business, and the terms of any contract will reinforce this priority. However, the employee has a right to review the severance agreement to identify penalties for future actions and attempt to renegotiate these terms or have them removed prior to signing.
- Respect any terms regarding confidentiality: Many severance agreements will contain certain terms that require a level of privacy or decorum. A breach of confidentiality will likely be triggered if these terms are broken. This can mean detailing previous work performed with your new employer or sharing specifics of your severance package with friends along social networking channels.
Whether from the perspective of the employer drafting the severance agreement, or the employee preparing to sign the agreement, the presence of a skilled lawyer is crucial. From drafting the contract to negotiating its terms to be more beneficial, do not hesitate to call upon an experienced lawyer who can provide the guidance you need.