Severance Agreements: Protecting Your Rights

Receiving a severance agreement can be both a relief and a source of concern. While severance packages offer financial support during career transitions, they often include terms that require careful consideration. Understanding the implications of a severance agreement and how to negotiate its terms is essential for protecting your rights and future opportunities.

What Is a Severance Agreement?

A severance agreement is a contract between an employer and an employee that outlines the terms of separation. While not required by law, many employers offer severance agreements as a way to facilitate smooth transitions and reduce the risk of legal disputes. Key components of a severance agreement may include:

• Severance Pay: A lump sum or continued salary payments for a specified period.
• Benefits Continuation: Extended health insurance or retirement benefits.
• Non-Disclosure Clauses: Provisions preventing you from sharing confidential company information.
• Non-Disparagement Clauses: Restrictions on speaking negatively about your former employer.
• Waiver of Claims: Requiring you to give up the right to sue the company for wrongful termination or other claims.

Carefully reviewing these terms is critical to understanding what you’re agreeing to before signing.

Common Issues in Severance Agreements

While severance agreements can provide valuable benefits, they may also include terms that limit your rights or future opportunities. Common concerns include:

• Overly Broad Waivers: Releasing the employer from liability for claims you may not be aware of yet.
• Restrictive Covenants: Non-compete or non-solicitation clauses that could hinder your ability to find new employment.
• Insufficient Compensation: Severance pay that does not reflect your tenure, role, or contributions to the company.
• Ambiguous Language: Vague terms that could lead to misunderstandings or disputes later.

Identifying and addressing these issues can help you negotiate a fairer agreement.

Steps to Take Before Signing a Severance Agreement

Before signing a severance agreement, take these steps to ensure your interests are protected:

1. Read the Agreement Thoroughly: Understand all terms, including waivers, restrictive covenants, and compensation details.
2. Ask Questions: Seek clarification from your employer on any clauses you find unclear or concerning.
3. Consult an Employment Lawyer: Have an attorney review the agreement to identify potential risks and recommend revisions.
4. Negotiate Terms: Request modifications to restrictive clauses or ask for additional compensation if the severance package seems inadequate.
5. Retain a Copy: Keep a signed copy of the final agreement for your records in case of future disputes.

How Castronovo & McKinney Can Help

Castronovo & McKinney, LLC has extensive experience reviewing, negotiating, and litigating severance agreements to protect employees’ rights. Our attorneys can:

• Analyze your severance agreement to identify any unfair or overly restrictive terms.
• Negotiate on your behalf to secure better compensation or reduce restrictive covenants.
• Provide guidance on the long-term implications of the agreement.
• Represent you in legal disputes if the employer fails to uphold the terms of the agreement.

We are dedicated to helping employees navigate severance agreements and ensuring they receive fair treatment during career transitions.

Protect Your Rights Before Signing

If you’ve been presented with a severance agreement, don’t sign without understanding its full implications. Contact
Castronovo & McKinney, Severance Agreement Attorneys today for a consultation. Let us help you secure a fair agreement that safeguards your future.