Severance agreements come in three basic flavors – voluntary, involuntary and group.
The Noble Law can help you draft, negotiate, and review your severance agreement with an employer to make sure the terms are fair and in the best interest of your future career. You may be told that the agreement is “standard” and cannot be changed. This may not be accurate. We’ve handled many cases where the initial terms were significantly improved in favor of our clients. Our team can help negotiate monetary and non-monetary considerations, including non- disparagement, reference-ability, and non-compete agreements. We can also negotiate the timing and content of any announcements about your departure.
When employment is terminated, we represent employees in negotiations and mediations arising out of disputes surrounding severance agreements. Having a strong legal advocate on your side can help reduce the anxiety of an already stressful situation. Employers will often try to give you a short time limit in which to sign the agreement, or even pressure you to sign during the termination conversation. It’s critical at this juncture to understand how some of the terms of the severance agreement could have an adverse impact on your future employment.
Schedule a consultation with our North Carolina employment law attorneys to protect your rights in this process and outline a strategy to get the most out of your severance agreement.
Employment contracts, bonus plans, severance agreements, sales plans, and non-competes can be complicated and even emotional negotiations. As trusted executive compensation advisors, we help you secure the best terms possible.
What Is a Severance Agreement?
A severance agreement is a contract an employer asks an employee to sign when their employment is terminated. Typically, the employer wants the employee to give up their right to sue the employer. As an incentive to sign, the agreement provides severance pay and other benefits to the employee.
North Carolina is an At-Will Employment state, which means that, typically, employers are allowed to fire an employee for any reason, with or without cause. Employers are not obligated to offer a severance package. However, there are exceptions to this rule. North Carolina has many laws that protect the rights of employees, such as the North Carolina Wage and Hour Act, the Occupational Safety and Health Act, the Retaliatory Employment Discrimination Act, and more. If an employer violates your rights as protected by these laws, a severance agreement can provide substantial compensation to an employee in exchange for the promise not to sue the employer.
What’s In a Severance Agreement?
The severance agreement will generally contain a description of the employee’s job, the dates of employment, and a waiver of liability (i.e., a commitment not to sue) for any events that occurred during employment.
Severance agreements have financial provisions that can benefit an employee, which may include:
- Covering the cost of COBRA
- Severance compensation
- Stock option vesting rights
- Accrued vacation and sick day pay
- Timing of compensation to maximize benefit
In addition, companies often offer non-financial terms in a severance agreement that obligate the company and benefit the departing employee. They include:
- Provision of references
- Out placement services
- Liquidated damages for breach
Some terms of the severance agreement obligate the employee after being terminated. They include:
- Liquidated damages for breach
The agreement makes clear the timing of severance payment. This is an important point to be negotiated by your severance agreement attorney. Payment over time can delay the commencement of unemployment and pension benefits, costing you thousands of dollars.
Severance Agreement Review
Companies often pressure employees to sign quickly. It’s worthwhile to take the time for a severance agreement review. Having a severance agreement lawyer review the proposed terms can make a huge difference when it comes to your financial security and your ability to work.
You want to be sure that you are receiving the amount of money you deserve in exchange for giving up your right to sue your employer.