If your employer has decided to end its relationship with you, you should hire an expert employment attorney to help you part ways with dignity, grace, and financial and career security. Often, employers offer what is called a “separation agreement” or “severance agreement” that will govern your exit from the company and your mutual obligations after your exit.
There are ten very good reasons why you should hire an employment lawyer to review and negotiate your separation agreement prior to signing it.
If an employment contract that you signed at the beginning of your employment guarantees severance, an employment attorney can explain what your rights, determine whether you even need to sign a separation agreement, and in some circumstances can bargain for more severance pay, especially if your employer wants to impose restrictive covenants on you (e.g., non-compete agreement).
A lawyer familiar with your particular industry or job category can counsel you as to whether the offered severance is within the usual range for your particular profession or industry.
2. Accrued Vacation and Other Earned Pay
The North Carolina Wage and Hour Act mandates that an employer pay all promised and earned wages and wage benefits to you upon termination of your employment. An attorney can review your prior agreements and policies to determine whether your employer has obligated itself to pay you for your accrued vacation time and any bonuses or commissions you have earned.
3. Employee Benefits
A separation agreement should explain what benefits the employee will receive upon separating from the employer, such as any continuation of health coverage and the employee’s right to stay in the employer’s medical plan temporarily under the federal COBRA law. If you don’t have another job lined up, this can be particularly important for you and your family to avoid a gap in necessary coverage.
4. Release of Claims
Employers are particularly interested in making sure in exchange for its offer of severance pay that you agree to release any potential claims you may have against the employer. Often, these releases include releases of employment discrimination, wrongful discharge, wage and hour claims, and most any other claim that could arise out of your relationship or divorce. However, a skilled attorney can help you ensure that you don’t waive important rights like the right to seek unemployment benefits, COBRA benefits, and the right to claim accrued and vested pension benefits and other benefits provided by company plans. You’ll also want to preserve a right to bring an action to enforce the separation agreement itself and to be indemnified by the company against third-party claims.
5. Promises Not to Trash-Talk
An employment lawyer can help to negotiate a reciprocal prohibition on both you and your employer disparaging one another publicly after you leave. Additionally, a good separation agreement will clearly establish rules that govern how an employer may handle references sought by your potential future employers. Often, your attorney will negotiate what is called a “neutral reference” which ensures that your employer may not say anything to a reference checker beyond verifying the dates of your prior employment and your salary.
6. Making Sure Everything’s in Writing
Oral promises made by your employer or its attorneys upon separation are rarely if ever enforceable if you have a written, signed agreement that doesn’t explicitly include those terms. An attorney will ensure that everything you’ve agreed to is in writing and enforceable.
7. Use of Proprietary Information
Your employer doesn’t want you using information that it has developed and that it owns after you leave. Your employment lawyer can help you carve out exceptions for property that is valuable to you that you may need in the future.
8. Non-Compete and Non-Solicit Agreements
Likewise, your employer doesn’t want you to compete with its business when you leave or interfere with its established customer base. Too often, employers draw these restrictive covenants too broadly which could scare off prospective employers who are considering hiring you. Expert employment counsel knows how to craft non-compete and non-solicit agreements that are fair to both parties and do not inhibit your right to earn a living.
Your employer doesn’t want you running around telling other employees or the public what you got out of your separation agreement, or even what it required you to give up. But sometimes, there are parties with which you need to share this information, such as your spouse, attorney, tax advisor, or CPA. Your attorney should also review the confidentiality provision to guarantee that you have a right to share the substance of your agreement in order to testify fully and truthfully when required to do so.
10. Future Cooperation
Some separation agreements will seek to secure your full cooperation with any future investigation or legal proceeding involving the employer. Of course, such involvement on your part could be burdensome after you have left. Your attorney can help you scale back this provision to require only reasonable cooperation on your part subject to your schedule and to require your former employer to provide sufficient notice prior to requesting your cooperation. A well-negotiated cooperation provision will also require that the employer pay your time, travel, and expenses resulting from complying.
You’d never hire your chiropractor to perform your heart surgery. Likewise, you should only hire an attorney dedicated to the practice of employment law to review your separation agreement and negotiate on your behalf so that you don’t leave your money on the table.