You’ll be tempted to sign the Severance Agreement. The severance payment offered to you in exchange for signing it looks good to the newly-unemployed. But should you sign the Severance Agreement?
In exchange for the severance payment, the typical Severance Agreement asks for two things from you: a release of any claims you may have against your employer and a series of promises designed to protect your employer’s business.
Before signing the Severance Agreement you need to determine whether you have any of the claims the Severance Agreement asks you to release and whether the promises the Severance Agreement asks you to make will interfere with your ability to find a new job.
Release of Claims
The typical Severance Agreement contains a very broad release of any claim you might have against your employer up to the date you sign the Severance Agreement. Most Severance Agreements also include releases for any claim you may have under a list of federal laws and their Jacksonville equivalents (the Civil Rights Act, the Age Discrimination in Employment Act and Older Workers’ Benefit Protection Act, the Americans with Disabilities Act, the Fair Labor Standards Act, the Family and Medical Leave Act, the Equal Pay Act, etc.).
If you have a claim against your employer, before signing the Severance Agreement you need to carefully consider the value of your claim and make sure the severance payment compensates you for it.
Promises to Protect Employer’s Business
The Severance Agreement might ask you to make a series of promises designed to protect your employer’s business from your departure. These promises can impact your ability to find a new job.
Typical promises include
- A promise not to compete with the company (also called a Covenant not to Compete). This promise might be limited to a certain geographic area and/or to a term of a few years. If you possess industry expertise, this promise could make it impossible to find a new job during the period the promise is in effect.
- A promise not to solicit the company’s customers. If your industry contacts are important to your future success, this promise could stifle performance on your new job.
- A promise not to use/disclose the company’s confidential information. Depending on what the phrase “confidential information” is defined to include, you may find the knowledge you developed while working for your former employer unavailable to you in a new job.
- A promise not to solicit other employees. If you built a great team at your former employer and want to hire them away with you, this provision defeats that plan.
Before signing that Severance Agreement be sure that it compensates you for any claims you have and that it either doesn’t interfere with your ability to continue working or compensates you for that interference.
This article is intended to provide friends and clients with general information regarding the subject matter covered. This article is not, and does not contain legal advice. This article may be considered attorney advertising.