8 Severance Agreement Considerations for Employees

Is your Massachusetts employer showing you the door while providing you with a severance agreement to consider?

It is advisable to go over it with an employment lawyer so that she can review the implications of each provision with you, as well as identify what is there and what also might not be there.

Below are eight things to consider when thinking about signing a separation agreement and release of all claims. Note that this cannot, and is not intended to, replace legal advice specific to your situation.

1. Payment – Is the payment reasonable in light of any claims you may be releasing, the amount you made, the circumstances under which you are leaving, and how long you worked there? When is it paid? How is it paid? How will paystub(s) be provided? Does it include all earned vacation time? How is it taxed?

2. Release of all claims -- Employers will generally include provision(s) requiring employees to release their right to pursue claims against the employer for all sorts of employment law violations, including employment discrimination, wage and hour violations, leave law violations, whistleblowing and/or retaliation. Depending upon what happened at work, this could have serious implications. It's worth talking to an employment lawyer specifically to determine if you have any claims, particularly before you sign away your right to pursue a claim.

3. Health insurance -- Did your employer provide your health insurance? Is it continued under the agreement? For what period of time? Is the premium subsidized over the same period? What does it include -- Medical? Dental?

4. Noncompete or nonsolicit -- Have you already signed a noncompetition or nonsolicitation agreement over the course of your employment with this employer? What effect will the severance agreement have on the obligations? Or, does the separation agreement provide for new noncompete or nonsolicit obligations instead? How will these affect your future employment prospects?

5. Employment references -- Does the agreement specify what happens if and when a prospective employer contacts this employer? Similarly, does the agreement include a nondisparagement clause, where the employer agrees not to disparage the employee?

6. Confidentiality clause -- Does the agreement include a clause that makes the terms of the agreement and/or all circumstances relating to it confidential? Should there be?

7. Unemployment eligibility -- Is there a consensus between the employer and employee as to how the employee's separation from employment came about? If there is not and unemployment benefits are meaningful to the employee, it should be a part of the severance agreement negotiation.

8. Return of property -- Does the employee still have property on the employer's premises, or does the employee still have the employer's property? The agreement should contemplate the disposition of all property.

Doorways Employment Law specializes in employment law counseling, strategic advice and representation to individuals and businesses across Massachusetts, including with respect to severance agreements. Contact Doorways Employment Law for an employment law consultation.