The coronavirus (COVID-19) outbreak has changed the work situations for millions of people throughout the United States, including a rise in the umber of unexpected terminations, lay-offs and furloughs. In this time of crisis, Maginnis Howard is particularly concerned about protecting employment rights.
A severance agreement is a contract between an employer and an employee that contains rules and guidelines for when an employee is terminated. A severance agreement should include details like how much pay the employee will be entitled to after termination, when benefits will be discontinued, etc. It is important to have your severance agreement reviewed by an experienced professional, now more than ever.
It is still important that you know what you are signing before putting your signature on the dotted line. If you have received a severance package from an employer, you need to speak with an attorney.
Severance Agreement Review
Employers use severance agreements when they terminate an employee to minimize their legal exposure. These agreements ask the employee to sign a contract agreeing to certain stipulations in exchange for a lump sum of cash or other financial benefit.
In some cases, employers ask all departing employees to sign this type of release. This process has become accepted and routine. In others, employers approach only the employees who might pursue a legal case against them.
Entering into this type of agreement requires you to exchange some of your legal rights. In other words, your former employer is getting something out of it. For this reason alone, you should not sign a severance agreement without having an attorney review it.
Importance of Severance Agreements
In many cases, former employees only focus on the amount of severance offered. They often fail to consider how signing a severance agreement could impact their future. For example, sometimes the release is simply a promise that will not file a lawsuit against the company. However, an employee may be agreeing to a wide range of burdensome restrictions on their ability to work for competitors. This includes non-compete and non-solicitation agreements, their use of “proprietary” or “confidential” information, and other obligations that could affect future employment prospects or their entitlement to benefits.
If you lose your job unexpectedly and are not sure of your next steps, we understand that money is even more tempting, but the hurdles this type of agreement could pose for your future employment and future financial gain are potentially very high. For this reason, it pays to know exactly what you are giving up and how much that is worth.
A severance agreement review can help you protect your rights. It can help lessen the overall impact this type of agreement can have on your future employment and give you peace of mind moving forward.
We can help.
Maginnis Howard’s employment attorneys are here to help you during this unprecedented time in our nation. You can reach our office with questions at (919)526-0450 or through our contact page.