When the end is near: severance agreements and nondisparagement clauses
A story in today's New York Times featured a common clause in severance agreement -- nondisparagement clauses.
Severance agreements generally set out the terms and conditions of the separation of employment between the employee and employer. They represent a significant doorway to pass through for each the employee and employer and should be approached and executed thoughtfully, voluntarily, and with full understanding of the impact of each term.
The New York Times article's focus was on nondisparagement clauses:
Marco Peña was among about 150 technology workers who were laid off in April by Abbott Laboratories, a global health care conglomerate with headquarters here. They handed in their badges and computer passwords, and turned over their work to a company based in India. But Mr. Peña, who had worked at Abbott for 12 years, said he had decided not to sign the agreement that was given to all departing employees, which included a nondisparagement clause.
Mr. Peña said his choice cost him at least $10,000 in severance pay. But on an April evening after he walked out of Abbott’s tree-lined campus here for the last time, he spent a few hours in a local bar at a gathering organized by technology worker advocates, speaking his mind about a job he had loved and lost.
“I just didn’t feel right about signing,” Mr. Peña said. “The clauses were pretty blanket. I felt like they were eroding my rights.”
There are any number of clauses in severance agreements that govern an employee's rights, including in the case of nondisparagement clauses, the right to speak freely about one's former employer. Other common features include the terms of severance payment, health insurance continuation, eligibility for unemployment benefits and treatment of employer's property and confidential information.
If you have received a severance agreement and want advice, or would like help drafting one, contact me.