SEVERANCE/SEPARATION AGREEMENTS

Most employees facing termination are simply left to file for unemployment benefits; employers are not required to give employees severance, assuming of course it is not otherwise mandated in the employer’s own policies and practices. Some employees, however, are fortunate enough to be offered severance pay as part of a separation agreement. Prior to signing a separation agreement presented by your employer, you should consult with an attorney to understand what you are entitled to and, more importantly, what you may be giving up in exchange for separation benefits being offered.

The majority of separation agreements offered by employers contain a universal release of any and all claims you may have against the company, including claims relating to discrimination and/or wrongful discharge. While this may not be an issue for some employees, you should examine with an attorney any possible claims you may have against your employer, especially when you feel your termination is without justification. For example, is your employer terminating you in order to fill your position with a younger less qualified individual? Is your employer offering you severance in the hopes of you not filing a sexual harassment claim against them? If you sign a separation agreement containing a general release, you will be prohibited from later asserting any such claims against your former employer.

Even in those instances where you do not have a potential claim against your employer, reviewing a separation agreement with an experienced attorney can help you address issues such as:

  • calculation of severance payments based on your experience
  • entitlement to paid time off (“PTO”)
  • continuance of medical benefits and/or application for COBRA
  • transfer of 401(k) or pension benefits to an approved plan
  • post-employment obligations regarding confidentiality and non-disparagement.

Most employers will instruct employees who are offered a separation agreement to review the same with an attorney. Although you may feel that the separation agreement and the benefits being offered are straightforward, it is worth your time and investment to speak with an experienced attorney regarding your rights and obligations arising under a separation agreement.

To learn more about your rights and obligations under a separation agreement, feel free to contact me at cheyer@scuramealey.com or call me at (973) 696-8391, ext. 222.