What Terms are Generally Found in a Severance Package?

Employees departing from a job (voluntarily or involuntarily) may receive a severance package. Why? Because the Company has decided that it is in the Company’s best interest to have the employee sign a document with certain specific terms that are protective to the employer. Some Company’s have a severance “policy” while others believe offering employees severance makes good business sense. Regarding the latter, many Company’s feel that in providing employees severance (sometimes even a minimal amount of pay), the employer is generally obtaining peace of mind that the former employer will not raise any claims in a government agency or in court against the employer.

So what terms are generally found in a severance agreement? Below are just a few of the many terms that can appear:

* Consideration – the amount the employee is to be paid in severance, the payment structure and possibly payment of employee’s health insurance or COBRA;

* General Release of Claims – employee to release the company (as well as its directors, officers, parent, subsidiary, etc,) from any claims from the beginning of the world until the date of signature;

* Confidentiality – employee’s agreement to keep the terms of the severance offer and the circumstances of their departure confidential;

* Non-Disparagement – employee’s agreement not to disparage or say anything bad (verbally or on social media) about the employer (officers, directors, parent subsidiary, etc.);

* No Re-Hire – employee agrees not to seek employment with the employer (parent, subsidiary, etc,) at a later date;

* Cooperation – employee agrees to cooperate with the employer should employer need transition assistance or if the employee has information the employer needs at a later date;

* Non-Compete / Non-Solicitation – employer restates any continuing obligation the employee has previously agreed to by written document or establishes new terms that the employee is being asked to agree to in conjunction with the signing of the severance agreement;

* Choice of Law/ Arbitration – employer sets out what Court and what law applies to the agreement and/or the requirement that the employee arbitrate any claims that may be raised;

* Effective Date of Agreement – the agreement will set forth the time period the employee has to review the agreement and whether the employee can revoke their signature;

* Right to Consult with Counsel – the agreement should state that the employee has a right to have the document reviewed with an attorney prior to signing the agreement. A severance package is an enforceable legal document. Any employee who receives a severance package should have the agreement reviewed prior to signature so as to understand the terms within, if there is any opportunity to increase the offer and what, if any, concerns the attorney sees regarding the language in the agreement and the basis for the employee’s termination / resignation.

Click here to schedule a consultation with Sheree Donath to have your severance package reviewed or learn more about your rights and options as an employee or former employee.

Fired? Downsized? Laid off? Let go? Terminated? Can I Get Severance?

Employees often want to know if there is a difference between being told they are fired, told they are being laid off, let go, downsized or terminated. In some instances there are, but in other instances, regardless of the terminology, fired is fired. Regardless of the word that is used for your departure, you will no longer be employed at your current employer and you will need to seek new employment. The questions that generally stem from there include when will my salary be paid until? When will my benefits end? Will I receive unemployment benefits? Do I have any restrictions on my employment? And will I be given a severance package on the way out?

Receipt of severance may depend on several items, including among others:

  • whether the Company has a severance plan
  • whether you are the only person being terminated as a one-off termination or whether you are part of a larger group of employees being let go as part of a layoff
  • whether your departure is based on your performance review or in response to a performance improvement plan
  • whether the Company is closing a portion of the company requiring the Company to provide written notice and payments for a set period of time (i.e. WARN notices)
  • whether you have been terminated with or without cause
  • whether the Company is concerned about your departure and wants you to sign an agreement releasing any claim(s) you may have raised or could raise against them
  • whether the Company wants you to sign a non-compete agreement

To learn more about what Why you Should have Your Severance Package Reviewed Before Signing, click here

If you have been fired, downsized, laid off, let go or terminated you should speak with an attorney to find out your rights and obligations. If you have received a severance agreement or believe you should have received one, contact Sheree Donath to have your document reviewed.

Is a Non-Compete Agreement Enforceable? How Will it Impact Me if I Sign it?

YES! Non-Compete Agreements are generally enforceable in New York. It is in essence a chess game between the employer and employee and/or the employer and their competitors. Unfortunately, many employees are pawns in the “game” and are harmed because they are not educated on their rights and options.

Non-Compete provisions can be found in a stand alone Non-Compete Agreement or within various documents, including, among others: Employment Agreements, Severance Agreements, Confidentiality Agreements, Relocation Agreements, Workplace Invention Agreements, Bonus Agreements, Deferred Compensation Agreements, Retention Agreements, etc. .

A Non-Compete Agreement is a legally binding contract and should be reviewed by an attorney prior to your signing the document. it may be presented at the onset of your employment in your onboarding documents, during the tenure of your employment or upon your voluntary or involuntary departure from employment.

Employers may use a Non-Compete Agreement to bind employees and to protect against their employees going to work against them for their competitors.

Employers may have an employee sign a Non-Solicitation Agreement. This can, in fact it often is, the same as a Non-Compete Agreement.

Some employers require all employees to sign a Non-Compete Agreement and some employers only have key employees sign these documents.

Non-Compete Agreements may impact your ability to transition to a new job. You may be required to disclose the terms of your Non-Compete to a potential new employer (even if the job is not the same or similar) and this may prevent you from obtaining new employment.

Any employees who receive a Non-Compete Agreement should have the agreement reviewed by an attorney prior to signing to determine if there are any terms within the agreement that can be removed or negotiated.

Any employee departing from employment, voluntarily or involuntarily. should have the agreement reviewed by an attorney prior to making any transition to understand their rights and obligations and to determine if the terms of the agreement apply to potential new employment and/or if there is any room for renegotiation of the terms upon the employee’s departure. A non-compete provision may effectively put the employee on the bench for a period of time and impact your ability to obtain new viable employment.

If you have received or have already signed a Non-Compete Agreement or an agreement that contains a non-solicitation or non-competition provision(s) contact Sheree Donath to have your document reviewed.

My Employer Gave Me a Retention Agreement. Should I Sign It?


A Retention Agreement is often given to valued employees to motivate them to stay with the employer during a period of transition or turmoil at the company.

The retention agreement may offer, among others, a bonus, enhanced severance, and/or equity if the employee remains employed with the employer for a set period of time.

Employees receiving a Retention Agreement will be required to sign it and return it to their employer. Before doing so, employees should have the Retention Agreement reviewed by an attorney to ensure that they will actually receive what is being offered to them if they meet the terms.

Specifically, the employee should understand the following issues, among others, that may or may not be addressed within the Retention Agreement:

  • the time period that the employee must remain with the employer
  • what happens if there is a change of control
  • has a change of control been defined
  • who is responsible to make payment of the bonus, severance, equity, etc. that is being offered
  • what happens if the employee is terminated without cause during the retention period – will the employee still receive the reward?
  • what happens if the employee seeks to resign or leaves with good reason- will the employee still receive the reward?
  • when will the employee receive the retention compensation and/or benefits
  • is the employee’s employment guaranteed during the retention period or is the employee considered at will

Retention Agreements generally occur when an employer is considering a sale of all or part of the business, or if there has been a mass exodus of employees departing from the company.

Employees may also consider requesting a retention bonus when there are periods of instability at their employer.

Depending on the value that they offer to the employer, employees may also be able to negotiate the terms of the Retention Agreement prior to execution.

A Retention Agreement is a legal and binding document. It should be reviewed prior to execution. For more information on these agreements or if you want to have your retention agreement reviewed, contact Sheree Donath to schedule a consultation.

My Employer Placed Me on a Performance Plan. Should I Quit or Stay and Try and Achieve the Plan’s Goals?



Performance Plans are used to manage out employees. They help the employer create a written record for termination. Employees should understand that they have rights even while they are still employed and do not have to accept the performance plan as is or resign from their employment.

Many employees who receive a performance plan, wonder if they should quit. Others are pushed to resign from their employment either by their manager or HR, sometimes with the offer of minimal severance if they do so. Let’s be clear – you DO NOT WANT TO QUIT! While that is the goal of your employer, that is often not in your best interest.

Employees that quit their jobs or resign from their employment generally do not get unemployment benefits. While this may seem minimal to some people, the benefits are ones that you are entitled to and some money is better then no money. Even if you decide to accept a severance package, you should make sure that you are not resigning from your employment.

Employees that quit may also lose out on unpaid bonuses and/or unvested stock, among others. Generally if you are not employed on the payment or vesting date(s) then you lose these rewards that you have already worked hard for and earned.

Moving forward on the performance plan, while stressful, allows you to continue getting a weekly paycheck and health benefits (if you have these through your employer) for you and/or your family for at least a set period of time.

There may be changes in the company while you are on the plan and the person who previously thought you didn’t offer enough value or with whom there was a conflict, may be let go and your position may be safe. You may also be able to prove to your employer that you should not have been placed on the performance plan making it difficult for the employer to continue the plan and/or fire you.

Staying on the plan also allows you time to look for a job while you are still employed, to possibly prevent a gap in your work history.

If you are placed on a performance plan, you should have the plan evaluated and question items within. You should not simply accept the statements within the performance review or the plan as factual. You should also question the motivation and timing of your being placed on the performance plan.

If you have received a performance plan, don’t just sit back or follow the guidance of your employer or HR. You should find out your rights and options. There are various ways to proceed based on what is best for you and/or your family.

Make it Happen! Take Action Now!

For more information about your options contact Sheree Donath to schedule a consultation.


What is the Faithless Servant Doctrine in Employment?

Allowance alimony getting bonus paid pay raise

The Faithless Servant Doctrine allows employers to claw back compensation paid to an employee, including salary, commissions and/or bonuses.

The Faithless Servant Doctrine may apply if the employer can show that the employee, during the course of their employment, engaged in repeated acts of disloyal conduct. Examples of disloyal conduct that have been found to be actionable are generally acts against the employer’s interest such as embezzlement, improperly competing against the employer and/or usurping business opportunities. In order to give rise to a claim under the Faithless Servant Doctrine, the employee’s conduct is generally such that it substantially and materially impacts the employer’s business or rises to the level of a breach of the duty of loyalty or good faith.

If the Faithless Servant Doctrine is found to apply, an employee may be required to forfeit all of their compensation (salary, commissions and/or bonuses) received during the time period that the employee engaged in such conduct, regardless of whether the employer can prove damages.

To find out more about the Faithless Servant Doctrine and how this may affect your employment and business opportunities or to find out what your rights and obligations are to your current employer click here.

I am Being “Bullied” at Work. Do I Have Any Rights? Is There Anything I Can Do to Stop the Bullying?

Are you a victim of bullying  No.

Workplace bullying comes in the form of:

  • Verbal abuse.
  • Offensive behaviors that are threatening, humiliating or intimidating.
  • Work interference or sabotage that prevents work from getting done.

Workplace bullying can be by one person or by a “mob” (this generally includes peers of the offender or those that think that assisting in the bullying will gain them favor with the perpetrator).

Generally, “bullies” in the workplace are in high power positions or have the ability to influence working conditions for the employee. In most instances it is a supervisor and subordinate relation. However, it does not have to be a person in a power position that bullies another employee. Bullies can be the employee’s peer who is trying to gain favor, an employee who’s work may be subpar, an employee who feels insignificant or valueless. Bullies take actions to make others feel bad in the attempt to make themselves seem more important.

Some examples of common tactics used by workplace bullies are:

  • Falsely accusing someone of errors the person didn’t actually make.
  • Hostilely staring at an employee or nonverbal intimidation.
  • Unjustly discounting the person’s thoughts or feelings in front of others.
  • Using the “silent treatment.” Refusing to acknowledge the person or say hello or goodbye.
  • Making up rules for specific people.
  • Disregarding and discrediting satisfactory work.
  • Harshly and constantly criticizing the person.
  • Starting, or failing to stop, destructive rumors or gossip about the person.
  • Encouraging people to turn against the person being tormented.
  • Singling out and isolating one person from other co-workers, either socially or physically.
  • Yelling, screaming or throwing tantrums in front of other colleagues to humiliate someone.

Donath Law, LLC has experience raising and resolving situations in which employees are being bullied in the workplace. While the laws have not been passed to protect most targets of bullying, there are creative alternatives to assist employees in protecting their employment and fighting back against bullies. Bullying may also fall under laws, among others, that protect against discrimination, sexual harassment, retaliation and breach of contract.

Some employees being bullied feel they have no option but to resign from their job. There are other options.

Don’t continue to be a victim! For more information or to find out how we can better assist you with your personal situation, contact Sheree Donath.

What is the Difference Between Termination With Cause and Termination Without Cause?

Press button with You re fired on it

Employees always question what it means to be Terminated With Cause versus Terminated Without Cause. The quick response, is that a Termination With Cause generally means that an employee engaged in some kind of misconduct whereas a Termination Without Cause is based upon a decision of the employer to end the employee’s employment.

Terminations With Cause generally occur in some of the following situations, including among others:

  • violations of company policy
  • insubordination
  • fraud
  • embezzlement
  • conviction of a crime
  • violence or threated violence at work
  • falsifying records

At times, Company’s try to claim that performance can be a reason for a Termination with Cause. However, poor performance or not meeting expectations is not necessarily Cause (i.e. gross misconduct) as defined above, but can be used to deny an employee benefits or severance that the employee may be entitled to receive had the employee been terminated without cause. Sometimes, employees who are about to be Terminated With Cause may be given the option to resign from the job.

Termination with Cause has substantial ramifications and could result in an employee losing stock options, equity, deferred compensation, severance, bonuses, unemployment benefits, etc.

Termination Without Cause is how most employees are terminated, as most employees are at-will employees. Examples of Termination Without Cause are layoffs, reductions in force, job eliminations, downsizing, etc. Terminations Without Cause generally afford employees with all the benefits an employer has promised through contracts and policies. Many employees Terminated Without Cause also receive severance benefits.

Regardless of whether an employee is Terminated With Cause or Terminated Without Cause the employee is still obligated to adhere to contracted restrictions on the employee’s future employment, including, Non-Compete Agreements, Non-Solicitation Agreements, Workplace Invention Agreements, Confidentiality Agreements, etc. Understanding what you may be entitled to receive when you are terminated may be confusing. Click here to schedule a time to speak with Sheree Donath to discuss your employment situation and to obtain guidance on your specific situation or if you believe you may be terminated soon.

My Job Placed Me on a Performance Improvement/Action Plan (PIP), What Does that Mean? What Should I do?

Many Companies use Performance Improvement Plans, also known as a PIP or a Performance Action Plan, or a final written warning as a basis for terminating an employee. They are also used in an effort to push the employee to resign from employment thereby potentially denying the employee of items to which the employee would be entitled if they remained employed (i.e. bonus, vesting, matching, commissions, promotions, etc.). At times the employee is offered a severance package in lieu of moving forward with the action plan.

The employee is given a written document outlining the supposed issues with the employee’s performance and a set amount of time to supposedly fix or “cure” the problems with the employee’s performance. The written document sets forth the goals that must be met in order for the employee to keep their job. The document generally comes after the employee has received a written performance review. These poor performance reviews are generally given for the sole purpose of placing the employee on a performance plan (click here for more information on this topic).

So what should an employee do if they receive this type of plan/warning? Do they have any options?

Yes, employees should not simply accept the performance plan they have received. In fact, many times, these plans are given to long-time employees who have previously been top performers, but have recently objected to some apparent impropriety or violation of law. They are used to create a paper trail – a record – for termination of the employee who the employer would otherwise not have any reason to terminate.

Employees should take the following steps, among others,

  • review the document given;
  • sign acknowledging receipt only and not agreement with the content;
  • be prepared to provide a written response;
  • question the goals that have to be met: are they objective or subjective? can they truly be met?
  • determine who will be deciding if the employee meets the terms;
  • determine the timing to do so;
  • find out what happens if the employee does not meet the goals;
  • speak with legal counsel to determine if the employee has legal recourse for receipt of the performance plan and the employee’s rights and options


Employees should not wait to seek counsel or assistance. If you have received a Performance Improvement/Action Plan or final warning and want to determine how you should proceed, contact Sheree Donath to schedule a consultation.

What Terms Should I Expect to See in My Consulting Agreement?

Many companies enter into consultancy agreements rather than employment agreements with their workers. Why? At times, it is because a treasured member of the organization is retiring or departing, but is full of knowledge and it would be best for the company to still have access to such value. At times, it is part of a severance arrangement and at times, it is project-based. For whatever reason the company and individual decide to enter into a consultancy agreement, the agreement should be clear and set forth specific terms regarding the arrangement.  

So what terms are generally within these documents or what terms should you expect to see? Below are a few provisions (not an all inclusive or required list) that may appear in your agreement:

– a description of the scope of services to be performed;
– the length and term of the engagement;
– that the individual will be an independent contractor and not an employee and therefore not entitled to employee benefits and responsible for taxes on payment;
– timing and method of payment;
– tax indemnification;
liability indemnification language;
– a confidentiality and proprietary information provision(s);
– workplace invention/ assignment provision(s);
– termination of agreement and notice requirements;
– malpractice and other insurance issues;
– standard contract provisions: choice of law; integration clauses, successors and assigns, modification of agreement, etc.  

If you have received a consultancy agreement or are in the process of negotiating the terms of the agreement, you should seek legal guidance and counsel. It is also important to understand how this new arrangement may be affected by agreements you may have previously entered into with other companies or former employers. Additionally, any agreement should be reviewed prior to execution to ensure that you are protected, that all necessary provisions are included and that you understand the terms and your obligations.  

If you would like such legal counsel or want to understand what responsibilities you have under your agreement should you end the arrangement, contact Sheree Donath by clicking here to schedule a time to discuss your situation.