Why Should I Have My Severance Package Reviewed Before Signing It?


Severance Word Cloud Concept in red caps with great terms such as pay package hr benefits and more.

Severance packages are legal documents that must be understood prior to signing and returning them to your employer even if they appear simply written. They have been carefully written by your employer to provide you with certain benefits in exchange for you giving up certain rights.

In reviewing a severance agreement, there are many items to consider. A few examples are:

(1) How long do you have to sign the agreement? This time period may be dependent upon your age and also if the separation is considered a one-off (meaning just you) or a mass layoff (multiple employees).

(2) Will the payments be made to you in lump sum or over time?

(3) Are the payments mitigated by your receipt of unemployment benefits or new employment?

(4) How long will your health benefits continue? Will the company pay for this?

(5) Will you receive your bonus or a pro-rated bonus?

(6) If you were relocated, will you be returned to your original location?

(7) Does the severance package include provisions such as a non-compete, non-solicitation, non-disclosure, confidentiality? If so, what do these mean for your future employability?

(8) Is their a mutual release of claims?

(9) Are you or have you received your 401K matching contribution from the company?

(10) Will you receive outplacement?

(11) Are you going to be paid for your accrued vacation days?

(12) Are you entitled to pay for unused sick days?

Besides the above, if you have been selected for termination and are offered a severance package, there is a key question to consider – Why was I personally selected to be fired?

Even if the company is undergoing a mass layoff, this question is still pertinent, as there may be a reason that you were selected for termination over another employee. Why? Did you report discrimination? Did you refuse to engage in impropriety? Was your selection based on an impermissible/illegal rationale?

A severance package should be reviewed even if you think you are comfortable with the offer. It is important that you understand the obligations that are required of you in exchange for the pay you are going to receive.

If you are interested in having your severance package reviewed to understand your rights and the document(s) itself, please contact our office. We understand that you must respond to a severance document in a timely fashion and are able to promptly review and respond to your concerns.

The Firm is also available to assist you in requesting and/or negotiating different terms and/or language in the severance agreement. The goal of severance is that the parties are able to part ways. The employee receives some benefits (money, benefits, etc.) while the employer receives a release of claims and possibly a non-compete and confidentiality.

Remember, signing a severance agreement may have an impact on your future and your ability to obtain future employment. It should not be taken lightly, but should be reviewed by a legal professional familiar with these documents. We have much experience in reviewing and negotiating these documents and are available to help you so that you do not have to try and maneuver this process alone.