When an employer fires an employee, whether on good terms or not, the company is often willing to enter into a severance agreement with the outgoing employee. There are numerous reasons a company may be willing to pay an employee severance. The employer may be grateful for the employee’s service to the company, and basically provide the employee a severance payment as a gift. More often than not, however, employers enter into severance agreements to prevent the employee from later filing a lawsuit against the company. It is highly advisable to have an attorney perform a severance agreement review to ensure your interests are fully protected.
Severance Agreement Considerations
Before you sign a severance agreement, it is highly advisable to have an attorney thoroughly review the agreement to ensure it furthers all of the employee’s interests. The most important provision in a severance contract is the requirement that the employee waive ALL legal claims he or she may have against the company. The amount of the severance payment is often based on the value of any potential claims against the employer. These claims may include wrongful termination, discrimination, retaliation, unpaid overtime or minimum wage, breach of contract, or other employment violations. However, without assistance of counsel, an employee may vastly undervalue their severance payment due to not understanding all potential claims against the company.
Many severance agreements also contain binding provisions that not only prevent the employee from suing the company for past wrongs, but also control the employee’s future conduct. For instance, some agreements contain confidentiality provisions, non-disparagement clauses, and covenants not-to-compete. These provisions, often ignored, may hurt the employee more than any severance payment will help.
Contact an Attorney to Perform a Severance Agreement Review
Illinois Labor and Employment Attorney
At Osborne Employment Law, we have experience reviewing and successfully negotiating severance agreements on behalf of our clients. We thoroughly explain any legal claims the employee may have against the company, and the legal implications of signing any severance agreement. In conducting a severance agreement review, the firm will negotiate on our client’s behalf to ensure the employee receives a fair severance payment based on his or her particular situation. If the company is unwilling to pay a reasonable severance, the firm may also be willing to represent the employee in proceeding with a lawsuit against the company. Contact the firm today if you are seeking severance agreement review.