Should I Sign this Severance Agreement . . . or Not?

I often receive calls from prospective clients who have been offered severance offers as part of a termination. Sometimes employers will offer a month or two’s worth of pay in exchange for a waiver of all claims that you might have against the employer in perpetuity. You should never sign a severance agreement without speaking with an attorney first.

Don’t get me wrong, this is not to say that severance agreements are always bad. Sometimes quite reasonable severance packages can be worked out with an attorney’s help, which avoids having to file a lawsuit. The problem in severance situations is that employees just don’t know what a reasonable severance package is under their unique circumstances. Negotiating a severance package is, after all, not something that the average person has done before. While there is information online available that claims what a “typical” severance package is or what a “normal” severance amount would be based upon your wages and how long you have worked for the employer, the truth is that there are no hard and fast rules on determining what a reasonable severance package is.

The circumstances surrounding the separation from your job are unique to you. Perhaps your termination violated a state or federal employment law. For example, perhaps you were terminated immediately after telling your boss that you just found out that you are pregnant. This violates state and federal laws protecting women who need to take maternity leave and prevents employers from discriminating against female employees based upon their pregnancy. Signing a severance agreement and accepting this severance package would forevermore waive your right to bring such a valuable lawsuit that you would have otherwise been able to pursue. Under this set of circumstances, your employer’s pregnancy discrimination would provide you with substantial leverage in negotiating the offered severance package upwards.  You likely won’t know that you have this leverage, however, unless you consult with an attorney prior to signing the severance agreement.

I frequently review severance agreements for clients and renegotiate severance packages to provide more monetary benefits for them as part of the package. It is also often possible for an attorney to negotiate extended health insurance benefits (or a monetary sum so that you can obtain your own).

The bottom line is you need to have an attorney review your severance agreement if you are contemplating whether or not to sign it. You could waive rights that you did not even realize that you had if you sign a severance agreement without first seeking the help of counsel.  Employers would love for you to hastily sign off on the document before you walk out the door—don’t do it!

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