When employees are terminated either on an individual basis, or as part of large-scale layoffs (commonly known as RIFs, or Reductions in Force), they are typically given a Severance Agreement or Separation Agreement. These agreements, because they are drafted by the company’s attorneys, are typically intended to make the employee sign away as many rights as possible, in exchange for the company offering as little as possible in return. In other words, standard Severance Agreements are typically completely one-sided, with the fired or laid-off employee receiving the short end of the stick. Nonetheless, out of a completely understandable sense of desperation, many employees haphazardly sign such agreements, hoping to get whatever meager sums the employer is offering in order to tide them over until they are again employed.
In reality, no one should sign a severance agreement, where they are being asked to surrender many of their rights, without first having an experienced attorney review the document. In many instances, people with completely valid claims end up forfeiting their rights to pursue such claims by signing severance agreements, only to realize, once it is too late, that they had a basis to file a claim and potentially win a significant award.
In some instances, employees are asked to sign severance agreements which are actually completely unenforceable, because they require the employee to waive rights which cannot be legally waived. In other instances, severance agreements greatly restrict the employee’s right to pursue new opportunities, by including “non-compete” clauses which not only will hamper the employee’s ability to earn a living, but also are so restrictive so as to be illegal. Upon scrutiny, it may turn out that the severance agreement is so restrictive, by closing off future opportunities, the long-term cost of signing the agreement far outweighs the payout which is offered in the agreement.
For all of these reasons, a severance agreement should be carefully reviewed by an experienced attorney before it is signed. By asking an attorney to review the agreement, the employee is not forfeiting any of their rights— the employee may well decide to sign the agreement anyway. But the attorney also may be able to advise the employee on ways to improve the terms, or may be able to quickly negotiate more generous terms, even without resorting to litigation. Please contact us today if you are interested in reviewing all of the available options with regard to your termination and any related Severance Agreement or Separation Agreement. If you have any questions or concerns regarding a Severance Agreement, call our office at 212-828-2770