A severance offer is often negotiable. Whether an employer will improve the package depends on the employee’s leverage, the circumstances of the separation, company practices, contractual rights, and the claims or risks the employer may be seeking to resolve.
What Is a Severance Agreement?
A severance agreement typically provides compensation or benefits in exchange for promises by the employee. Those promises often include a release of legal claims and may also address confidentiality, non-disparagement, return of company property, cooperation, or other terms.
What Can Be Negotiated?
Depending on the circumstances, employees may negotiate the amount of severance, payment timing, benefit continuation, treatment of bonuses or commissions, reference language, non-disparagement terms, confidentiality provisions, and the scope of the release.
Understand the Release
A release can waive valuable legal claims. Before signing, employees should understand which claims are being released, which rights cannot lawfully be waived, and whether the agreement contains deadlines or revocation rights.
Age 40 and Older
Federal law imposes special requirements on certain waivers of federal age-discrimination claims. The required review and revocation periods depend on the type of termination program and the agreement.
Do Not Focus Only on the Dollar Amount
The value of a severance agreement can depend on much more than the payment. Tax treatment, benefits, reference terms, restrictive language, and the employee’s potential claims may all matter.
Have the Agreement Reviewed
North Law reviews and negotiates severance agreements for employees. If you have received a severance offer, contact North Law for a confidential consultation before signing.