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What would you do if your job was suddenly on the line? Facing termination is more common than you think, and understanding your employee rights and negotiating severance package can make all the difference. In this enlightening episode of the Employee Survival Guide®, attorney Mark Carey dives deep into the often murky waters of severance negotiations. Did you know that most employees are not legally entitled to severance pay? That’s right! This episode is a must-listen for anyone navigating the complexities of employment law and severance agreements.
Mark emphasizes the importance of viewing severance offers not as a mere formality but as a negotiation opportunity. He outlines essential steps to take upon receiving a severance agreement, including reviewing the offer, confirming entitlements, and understanding the intricacies of legal releases. Are you aware of potential legal claims you may have against your employer? Mark shares how these claims can serve as leverage while negotiating your severance package, empowering you to secure a better outcome.
But that’s not all—this episode also covers critical elements like non-compete clauses and non-disparagement provisions. These can significantly impact your future employment opportunities and reputation. Mark encourages employees to negotiate severance package terms that protect their career trajectory and personal brand. After all, your work life deserves to be safeguarded against hostile work environments, workplace bullying, and discrimination in any form, whether it’s age discrimination, race discrimination, or sexual harassment.
By tuning into this episode, you’ll gain invaluable insights into negotiating severance packages, severance pay, severance compensation, and the broader landscape of employee rights. Whether you’re facing termination for cause or seeking to understand the nuances of employment contracts, this episode equips you with the knowledge to advocate for yourself effectively. Empower yourself with insider tips on navigating employment law issues, and learn how to approach severance negotiations with confidence.
Join us on this journey to employee empowerment and workplace advocacy. Remember, understanding your rights is not just about survival; it’s about thriving in your career. Don’t miss out on these essential strategies that can help you turn a challenging situation into an opportunity for growth. Listen now to the Employee Survival Guide® and take control of your employment destiny!
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For more information, please contact our employment attorneys at Carey & Associates, P.C. at 203-255-4150, www.capclaw.com.
Disclaimer: For educational use only, not intended to be legal advice.
Podcast: An Employment Severance Agreement Explained in Detail
Transcript:
Speaker #0 Welcome to another edition of the Employee Survival Guide, where you can learn everything your employer does not want you to know about and more. Now, here’s attorney Mark Carey. Speaker #1 Hey, it’s Mark here, and welcome to the next edition of the Employee Survival Guide. This week, we’re going to talk about what to expect if you’re expecting to get fired. Most employees are at will, and if they are terminated from their employment, they will receive a package from their employers, namely what’s called a separation or severance agreement. This podcast will discuss various points that I want to make regarding when you receive a severance offer and what to do about it. Number one, think of your separation or severance offer as a negotiation, because it is one. Most employees are not entitled to severance. There is no such thing as legally required two weeks of pay or anything like that for the years of service. However, most of the time employers offer terminated employees severance anyway. Why do they do this? because they want you to sign a legal release and waiver of claims, which is a contractual agreement that you are waiving any rights or grounds you might have to bring a lawsuit against your employer. Your severance packet is the legal release. So, what does this mean? It means that they are offering you something because they want you to sign the release. This is a tit-for-tat. Don’t be afraid to ask for more during the negotiation before you sign, because it is a negotiation. Number two, review what you are being offered. usually money. Often at-will employees are not legally entitled to a specific amount of severance from their employer. The first element you should think about before you sign is whether they are offering you enough money in exchange for what they want from you, the legal release. There might also be other components in your separation offer, such as continuation of health care or other benefits or stock vesting. Start by reviewing your agreement carefully to see what they are offering you. Number three. Confirm that you are being offered everything you are entitled to. Review your employment handbook and any other documents you signed at any point during your employment, whether you signed it at the start of the employment or later on. You are always entitled to be paid out for any accrued sick time, vacation time, or any other form of PTO your company offers. You’re also entitled to earn any wages, typically referred to as your last paycheck. You must be paid for all the time. that you committed to your work during the last pay period. Review your documents to confirm whether there are any contractual or established policies regarding termination, separation, or severance. For example, your employer might be required to provide you with a notice period before they terminate you. This is so-called a garden leave. This might be days or weeks or months. A notice period can be detailed in your individual employment documents or in the company’s general documents folder on your portal for the company, for example, the employee handbook. Number four, ask for a copy of your personnel file. You are legally entitled to it in certain states like Connecticut. All you need to do is send an email. It could be to your HR department or your own individual supervisor. The personnel file will contain all the documents you signed with your employer so that this can be particularly helpful when you have been employed for a while and you can’t remember if you kept copies of everything. Number five, confirm whether you have an ERISA group benefits plan which could include severance benefits. The Employee Retirement Income Security Act of 1974, so-called ERISA, is a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry. Sometimes employers utilize ERISA plans for severance benefits. If you’re unsure, ask your employer, and there’s also a free website where you can search for your company name. That’s called, the website’s called freeERISA.benefitspro.com. That’s freeERISA. dot benefits pro dot com. You will have to make an account, but it’s also free. Number six, consider whether you might have any legal claims against your employer. If you have a valid legal claim against your employer, this is a huge source of leverage as you can negotiate your severance offer to get more money. Remember, this is a pretty simple exchange. They are offering you something, usually money, in exchange for your agreement to drop any potential legal claims you might have, even if you don’t have any. This boils down to mean that they are potentially offering you free money in exchange for nothing if you have no legal claims. Employers do this simply for peace of mind and sometimes for reputational reasons in the industry. If you have a legal claim, that can be a game changer in a separation negotiation. At that point, you have to consider the elements on a scale. The value of your legal claim on one side against the value of the legal release your employer wants on the other side. Bottom line? It means your company might be willing to offer you much more separation than your severance pay in exchange for you signing the legal release. Number seven, request to be released from any non-compete, non-competitive, non-solicit or other restrictive covenants, if any apply to you. If you are subject to any type of non-compete, non-solicit, or other restrictive covenants, now is the time to request to be released from them. Remember, these are simply contractual agreements, and your employer can agree to release you at any time. Even if your employer is not legally required to release you, they are often willing to discuss the option and might agree to reduce the restrictiveness of some covenants, like non-competes in the area of coverage they apply. from, let’s say, the United States down to one singular state or locale. This is all part of a negotiation when you get the severance offer. Even if such covenants are not spelled out in your separation offer, they might still apply to you if your separation offer incorporates by reference. It’s a legal phrase that lawyers use that incorporates prior agreements into the current agreement you’re entering into. Sometimes, if an employee signed a non-compete while they were employed, the separation offer might say something like this, quote, Employee agrees that the employee’s employment agreement is expressly incorporated by reference into this agreement as if set forth fully herein. End quote. Sounds legal, because it is. This means that every single restriction in your employment agreement still applies to you, even after you sign the new separation offer. Be aware. Number eight. Review non-disparagement provisions and ask that they likewise protect you. Many separation offers contain a non-disparagement clause. which will say something along the lines of, quote, employee agrees not to make any statements which disparage the company or in any way were harmful to the reputation of the company, end quote. These provisions are very broad and much more broad than the legal definitions of defamation or slander. A single angry comment on Facebook, for example, could be a violation of this provision. If you sign an agreement that contains this, be aware that you should avoid any negative commentary about your former employer, including online. Likewise, you can ask for the same protection for yourself that the employer commits to not make any disparaging, damaging, or negative statements about you in the future. Again, don’t be afraid to negotiate. Number nine, control your future reference. Similar to the non-disparagement, you can also ask for language in your agreement to control how your employer or what they say about you after you leave. The exact language is up to you. But we often request a provision that will only allow the employer to confirm your dates of employment and position or title held. You can agree or not agree to allow the former employer to give out your salary information. Bottom line is most employers don’t give references, so stop asking. What you want to do is really get someone who works there as a colleague while you were there to get a letter on reference or on letterhead, which will spell out that you’re qualified in the job you did and maybe the employer doesn’t know. That’s a better option than having the neutral reference by the employer. Number 10. Arbitration clauses. My favorite. Many separation offers include a clause which states that any dispute under this agreement must be brought in arbitration. Like the rest of the provisions, it is ultimately up to you what you are willing to sign, but we typically encourage clients to fight against these provisions. It can be counterintuitive, but if a dispute arises, our experience has demonstrated that Employees can often have much more leverage without arbitration restrictions. What this boils down to is the issue of forced arbitration in employment. And what they’re doing essentially is making confidential and the actions of the company so that outside individuals like lawyers, like myself, can’t view the actions of, let’s say, sexual harassment, like a Weinstein case or anything like that, and because they’re forcing employees. into arbitration, which is extremely confidential and non-public. For more information about this article and the topics raised herein, please contact our office at Cary & Associates PC or on the web at capclaw.com. Thank you for listening and talk to you next week.