Severance packages may contain mitigated severance. What this means, is that the company is offering to pay you a set amount but may reduce that amount by any compensation, benefits, bonus that you may receive from another source. For example, should you do any work, whether it be part-time, full-time, as a consultation or in any other capacity, then you would be required to report that to your former employer and share with your former employer the payments/benefits you received for your services. At times, acceptance of a new offer may result in a forfeiture of your remaining severance.

Mitigated severance is problematic. A few of these include:

• It potentially limits your collecting payment/benefits you were offered when you signed the severance agreement.
• It may open you up to potential liability. For instance, employees who have restrictive covenants, are not reporting to their former employer information about their new current employer. This provides notice, of possible or perceived violations, that your former employer may not have obtained on their own after your departure.
• It may deter you from seeking alternate employment opportunities during the duration of your severance period.

Severance packages should be reviewed prior to execution to ensure that you understand the terms within, what rights you may be giving up and any obligations you may have moving forward.

For more information on your rights and options, or to see if your severance offer can be negotiated and/or enhanced, contact Sheree Donath, Esq, at sheree@donathlaw.com or by clicking here.

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