Most people change jobs at least a few times throughout their careers. Statistics show that an average person will change jobs 10 to 15 times over their career. When you leave their employment, your employer may provide you with a severance package. A severance package often provides employees with payments or benefits after you leave the company. In addition, the severance package may also include a disclaimer, release, or waiver. It can be in your best interest to have an attorney review the severance package before you sign it.
How Much Will I Be Paid?
The severance package includes the amount of money the company will pay you when you leave employment. The payment may be a one-time payment, or it could be regular payments over a period of time. Some companies have standard severance payments based on the length of employment. For instance, a company may offer severance payments equal to one week for every year of employment. It is important to note that you may be able to negotiate a higher payment with help from an attorney.
Benefits Following Employment
On termination, your employer may provide you with some continuing benefits for a period of time. One of these benefits is health insurance. Generally, a company will continue health coverage only until the end of the month of termination. After that, you may opt to participate in COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985). Participants may obtain free health insurance coverage if they qualify, but it is only for a short length of time.
Non-Compete, Non-Disparagement, and Release Waivers
Most severance agreements include waivers such as non-compete clauses, non-disparagement clauses, and release waivers. These clauses are generally more favorable for employers, and they are meant to limit what a former employee may do. For example, a non-compete clause may restrict a former employee from taking a job with a competitor for a specific period of time. A non-disparagement clause means that the former employee cannot make negative or disparaging claims about the company, even on social media.
A release waiver is usually part of most severance agreements. This is an agreement to release your employer from any liability and prevents you from filing a lawsuit against them. For example, this clause would waive your right to file a claim of discrimination or any other claim. It means that even if you have a legitimate claim of wrongdoing, you would not be allowed to file a lawsuit to seek justice.
Negotiating Severance Package Terms
When you get laid off from your company, you may be taken off guard. Your employer may present you with a severance agreement and ask you to sign it immediately. The employer may threaten to withhold your final paycheck until you sign the document. However, this practice is illegal. Remember that you do not need to sign the agreement until you have had ample time to read it. It is helpful to have a qualified attorney review the severance package first.
Your lawyer may be able to negotiate some more favorable terms in the agreement, such as more severance pay and additional benefits. You may also be able to make some changes to the various clauses so you will have the ability to add some of your own terms. If you have concerns about waiving your rights, your attorney will help you decide whether it is in your best interest to sign the severance agreement at all.
To learn more about severance agreements and to request a consultation, contact us at Moen Sheehan Meyer, Ltd. at (608) 784-8310 or online.