You are not required to sign a severance agreement if it does not serve your interests. These contracts, also referred to as separation agreements, are legally binding. You and your employer reach an agreement to part with something in exchange for something else.
Typically, that conversation goes like this: You consent to refrain from bringing legal action against your employer regarding your former employment and termination in return for severance compensation and other benefits.
In many circumstances, you also consent to refrain from mistreating your employer in any other way following termination. Generally speaking, you must not solicit clients, customers, or coworkers of your employer, and you cannot compete with your employer, disclose trade secrets, and speak ill of your employer after termination.
There are several reasons why you can decide against signing such a contract. Read on to learn about them and then contact PLBH at (800) 435-7542 if you believe you have been the victim of wrongful termination.
Do Not Sign if You Plan to Sue Your Employer
The likelihood that you may file a lawsuit against your company after being let go is perhaps the most frequent reason why people do not want to sign a severance agreement. Employers mostly utilize severance agreements to prevent you from suing them. Because of this, many fired employees do not receive one.
If your employer does offer you a severance agreement, it means they believe you may have a case against them. They are willing to pay for you to give up your right to sue, and they want you to do it. “Waiver of claims” or “release of claims” will be a crucial clause in the severance agreement. The types of cases you agree to drop in order to obtain the severance compensation will be listed in that clause.
The types of litigation covered by this clause frequently mirror the concerns of your employer. They frequently contain legal demands for defamation, wrongful termination, discrimination, disability claims, continuation of health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA), family leave privileges under the Family and Medical Leave Act (FMLA), retirement benefits under the Employee Retirement Income Security Act (ERISA), and any other claims that were unknown at the time the severance agreement was signed are examples of claims that could arise.
Additionally, they frequently restrict you from taking part in any class actions against the business. By signing this release of claims, you waive your right to bring any legal action against your employer that is mentioned in the release. If you accept your severance compensation and sign the contract, you forfeit your right to pursue these claims.
Do Not Sign if You Believe the Severance Agreement Should Include Additional Compensation
You can decline to sign the contract if you feel the price is too low. In general, severance agreements are not one-sided contracts. These can be worked out. If you have leverage, you can enhance the amount of severance money being provided.
Even if the agreement required you to give up your right to sue your company and you had planned to do so, the severance payment might still make it worthwhile. Even though the offer made by your employer will often be less than the damages you could obtain through a lawsuit, it can still be in your best interests to accept it. You can count on getting your severance compensation, which is frequently paid in one single sum. Also, you won’t have to spend the money, effort, and time required to file a lawsuit.
Yet, the initial offer from your employer rarely comes near to what you might be entitled to. Usually, it takes a few rounds of haggling before your severance compensation is satisfactory. It is normally not a good idea to sign the agreement unless you are paid enough to give up your rights.
Do Not Sign a Severance Agreement without Legal Representation
If you do not have legal representation, you should also avoid signing a severance agreement. Before signing a severance agreement, you should seek legal counsel from a lawyer for a number of reasons. The terms of a severance agreement can be complicated to understand, the rights you are agreeing to waive may not be able to be waived, rendering that portion of the agreement unenforceable, and you might not fully understand how strictly the agreement will regulate your conduct after termination.
An attorney will have the knowledge necessary to determine whether the severance package is adequate. Contact PLBH at (800) 435-7542 now to request a free legal consultation.