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Severance Negotiations

If you’ve been laid off, or you have resigned, your employer may hand you what is called a Termination Agreement, Severance Agreement, or Separation Agreement and General Release. Whatever your employer calls it, it may look like a “business as usual” communication on company stationery. Beware that it probably contains terms and clauses that are mostly to your employer’s advantage.

To persuade you to sign it, your employer might tempt you with severance pay, extra severance pay, or a substantial overall package. Unfortunately, due to the vulnerability (emotional and financial) that accompanies these situations, many employees just take the money on the table without a negotiation. They don’t realize that the severance agreement is binding- it’s a contract with teeth that bite hard. Ouch, they say, after they realize that they have relinquished their right to ever sue the employer upon accepting, acknowledging, and signing the severance agreement.

As soon as you are handed such an agreement, it would be prudent for you to schedule a consultation with us. We would advise you whether the agreement contains all the legal requirements necessary for it to be protective of your interests, and evaluate the leverage you may have, for negotiating higher severance pay than what is already on the table. Contrary to what Human Resources, or your boss may tell you, remember that you should never be required to sign such an agreement immediately. The employer should give you a reasonable amount of time to consider the severance offer, including time to contact an attorney to review it.

If the employer refuses to increase the value of your severance package, you may decide, after weighing the options provided by counsel, that it is best not to sign the agreement, in order that you keep open your right to pursue legal action against your employer.

You always have the option of retaining counsel to negotiate an increased package on your behalf. You have much to gain by this approach, because an experienced attorney can provide you with the expertise and insight you need to bring your employer to the table in a manner that is satisfactory to you. If, at the conclusion of the negotiations, you feel you would be better off declining to sign it, you may decide to vindicate your rights in another forum.