Layoffs are occurring in many industries, for many reasons. Some people are being notified of their impending termination directly by HR while others are finding out via email. Regardless of how you may be notified that your job has been, or is soon to be eliminated, many laid off workers are being presented with severance packages. While many people face with unemployment are eager to receive some money and/or benefits, don’t be so quick to sign the documents presented to you without first understanding the offer, the terms in the agreement and what effect signing the agreement has on you and your future.
Here are a few items to consider before signing the severance document(s):
HAVE THE SEVERANCE AGREEMENT REVIEWED. The document presented to you is a legal and binding agreement. It will even state within the agreement that you have the right to have the agreement reviewed by an attorney. You should make sure, even if your intent is to sign the agreement, that you understand the terms within it. The severance agreement will contain a release of claims (meaning you cannot bring a lawsuit against the company if you sign the agreement), confidentiality provisions, and may contain a non-compete or non-solicitation provision(s), non-disparagement provision, no rehire provision, among others. Once signed, other than the seven-day revocation period found within certain severance agreements, you are in a binding contract.
ARE YOU GETTING EVERYTHING YOU ARE ENTITLED TO RECEIVE? Are you due monies or benefits that are not included in the agreement? Are you due expenses? Are you entitled to a bonus? Is this the proper amount of severance that is being offered to you? Can you enhance the offer? Is there a severance plan or precedent as to severance offers given to others?
WHY WERE YOU SELECTED FOR TERMINATION? While the company has announced that numerous people are being laid off, there is still a selection process. Was your selection for termination due to an improper motivation? This should be explored with a legal professional. If the answer is yes, then the severance offered may not be sufficient based on the circumstances.
CAN YOU NEGOTIATE THE TERMS AND LANGUAGE OF THE AGREEMENT? Everything in life is open to negotiation if people are properly motivated and you are willing to possibly assume some risk.
TIME TO SIGN THE AGREEMENT. The severance agreement will contain a specific time period for review and execution. Be sure to pay attention to this date, as once you miss the date, the offer may be withdrawn.
Keep in mind that the company is not offering you severance because they are just being kind. It is a business transaction. The company is offering you money in exchange for your signature on the document. They are, in essence, buying the obligations they are requesting of you (i.e. release of claims, confidentiality, non-disparagement, non-compete etc.). Also, keep in mind that the money you are being offered will be taxed when received and consider if this amount is sufficient for you to accept the commitments the company is requiring.
If you have received a severance package already or expect to receive one soon, contact Sheree Donath, Esq. (by clicking here) to have your severance package reviewed; to understand your rights; to discuss whether the package can be enhanced and/or to engage Donath Law, LLC to negotiate the terms of the severance offer.