We Fight For Employee Rights

Don’t sign that severance agreement yet

On Behalf of | Dec 16, 2020 | Employment Law

If your employer sits you down and announces the decision to terminate you, you may feel like the boss has all the control in the situation. However, depending on the circumstances, you may have some leverage when it comes to your separation agreement.

In the same way you negotiated your employment contract, you may also have room to negotiate the terms of your separation agreement. These are not always as straightforward as they seem, and some employees don’t realize severance agreements may also rob them of important rights.

What might a severance package include?

You may think your employer is being kind to offer you a severance package, but such agreements typically include some benefit for the company. Your employer may offer any of the following:

  • Company stocks or transfer of your retirement plan
  • Continued coverage under the company’s life, health and disability insurance plans, paid by the company until you find another job
  • Assistance with finding a new position
  • A letter of recommendation to potential employers
  • Agreement that you may draft the announcement of your departure and that your former employer will not disparage your name after you leave
  • Additional company perks, such as continued use of a company car, membership to a fitness club or company electronics

Of course, money is the mainstay of the severance agreement. Don’t be swayed by the amount your employer offers. In fact, employees typically have a limited amount of time to consider the separation offer and obtain legal counsel before signing. Generally, a severance agreement offers the equivalent of one or two weeks of your pay for every year you were with the company, but you may be able to negotiate for more depending on your history with the business and the reasons for your termination.

What are you giving up?

What you get in a severance agreement may not be as critical as what you give up. The contract you sign may forbid you from speaking out about unethical behavior in the company, or it may confirm your employment contract’s stipulation against working for the company’s competitors.

Most importantly, you may have to waive your right to file a lawsuit against your former employer. This means if you experienced discrimination, harassment or other injustices on the job, you surrender your rights to take legal action once you sign the severance agreement. It may be worthwhile discussing the terms of the separation agreement with a Rhode Island attorney before signing away these important rights.