With all the layoffs going on, here’s some friendly advice to employees. DO NOT BLINDLY SIGN A SEVERANCE AGREEMENT.
The terms are usually completely one-sided and require you to agree to, among others, 1) release/waive any claims/lawsuits you have against the employer (and any other entity or individual even remotely associated with the employer), 2) overbroad and one-sided confidentiality and non-disparagement, and 3) restrictive covenants (promise not to compete, etc.).
And for what? Sometimes just a few weeks of severance payments (which generally prevent you from collecting unemployment benefits during the weeks you receive severance payments) and nothing more. Worse, usually there are terms that require you to pay the employee’s attorneys fees, forfeit the severance amount, or be subject to some other ridiculous penalty if the employer unilaterally determines you breached a term in the agreement.
Instead, contact an employment law attorney before you sign for two reasons.
First, you may have legitimate claims against your employer for employment law violations that you will be waiving. These claims are generally worth significantly more than the severance offered. Your attorney can assert those claims on your behalf to negotiate a better severance amount and more reasonable and mutual terms. If you sign, those claims are likely gone. Most of the employees who contact us are not even aware of potential claims they have for various employment law violations for past employer actions or related to the layoff itself. A mass layoff is an opportune time for bad employers to get rid of employees in protected classes (age, sex, gender, race/color, disability, whistleblowers, on or returning from medical leave, etc.) under the guise of it being a general workforce reduction. EMPLOYERS OFTEN USE MASS LAYOFFS TO UNLAWFULLY TARGET EMPLOYEES FOR DISCRIMINATORY OR RETALIATORY REASONS. It happens more often than you know.
Second, even if there are no claims to assert, it’s always wise to contact an employment law attorney to explain the terms of the severance agreement and what you’re agreeing to BEFORE YOU SIGN. That way you can make an educated decision on whether or not the money being offered is worth the waivers and restrictions.
This advice applies not only to employees that are laid off, but anytime employees are presented with a severance agreement as part of an employment termination. In fact, if you’re presented with a severance agreement not related to a layoff, be suspicious and definitely contact an employment law attorney.