Severance agreements are often presented to employees when they are terminated from their employment or facing a company-wide layoff. In these instances, compensation may be offered in exchange for waiving other rights the employee may have had — such as the right to sue the employer. But before signing any severance agreement, it’s crucial to consult with an employment attorney who can conduct a thorough severance agreement review. They will be able to advise you regarding whether it is in your best interests to enter into the agreement and accept the severance package you’ve been offered.
A severance agreement is a contract that an employer may request an employee to sign that contains a number of guidelines to be followed by each party after termination. Severance packages may include various forms of compensation and extended benefits for an employee, in exchange for agreeing not to take legal action against the former employer. A severance agreement review is the process associated with assessing the document presented by the employer to ensure the terms are fair, and the compensation is adequate, before the employee signs it.
In the event you have been offered a severance package, it’s imperative to have a skillful attorney review the document to avoid inadvertently waiving your legal rights and foregoing your financial interests. As part of a severance agreement review, an attorney will discuss the terms and conditions with you to ensure you understand your rights and obligations. They will also advise you regarding the future limitations and restrictions you could face as a result of signing the agreement. If necessary, an attorney will negotiate any terms that could potentially be problematic for you or prevent you from carrying out your professional goals in the future.
Severance pay is not legally required in Ohio or under federal law. However, if a severance package is offered, certain protections are offered under the Older Workers Benefit Protection Act to workers over the age of 40 who are employed by a company of 40 people or more. In these cases, an employer must generally give an employee over the age of 40 a 21-day period to consider a severance agreement from the date of issuance — or 45 days if the termination is in connection with a layoff of more than one employee. The employee must also be given a 7-day period in which they are permitted to revoke the agreement after signing.
It’s vital to have an attorney for a severance agreement review. These types of contracts often contain complex language and legal terms that are confusing to understand. An attorney can clarify what each provision means and precisely what your employer is offering. It’s also crucial to understand what rights you might be giving up, as well as what restrictions might be imposed on you.
Significantly, some severance agreements may:
In addition to ensuring you receive the compensation you deserve for your years of service to your former employer, it’s essential to protect your future career prospects. Since a severance agreement usually contains a non-compete clause that may prevent you from working with competitors, any potential implications should be carefully considered.
An employee is under no legal obligation to execute a severance agreement. In fact, there are times when doing so would be adverse to your interests. While an experienced employment lawyer can discuss your specific circumstances, it is usually not a good idea to sign a severance agreement if you intend to bring a lawsuit against your former employer after termination or it would impose substantial restrictions on you professionally in the future.
You should not sign a severance agreement if you do not fully understand the terms it contains — or the severance package offered to you is insufficient. An employment law attorney will be able to explain the provisions included in your severance agreement and evaluate whether the employer’s offer is fair. If the offer is not adequate, your attorney can negotiate different terms and a higher amount of pay. Importantly, the severance pay should be enough to warrant you relinquishing the rights you would otherwise have had.
A severance agreement is a legally binding contract that could impact you significantly for years to come. If you’ve been presented with a severance agreement, you should review it with a knowledgeable attorney before signing. Located in Westlake, employment law attorney Chris Lalak provides reliable representation to clients throughout Ohio for a broad scope of employment matters, including severance agreement review. Contact Lalak LLC today to schedule a free, confidential, no-obligation consultation and learn how we can help.
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