Typically a severance agreement, or severance package, is offered to an employee when an employer is having to terminate their employment. Once signed, the agreement is legally binding and waives any rights you have to sue for wrongful termination. If your employer is offering you a severance agreement, contact JML Law in Long Beach at 818-610-8800 for a free initial consultation.
What To Expect In A Severance Agreement
A severance agreement is a contract that is drawn up between an employer and an employee that states each of their rights and responsibilities regarding benefits and/or salaries should the employee be terminated. These severance agreements typically include one or more of the following:
- A specified sum of money based on the length of employment
- Possible continued medical benefits or insurance coverages
- Stock options
- Pension, retirement, and 401k options
- Letters of recommendation for future employers
Severance agreements are complicated and contain a myriad of legal terminology. However, not only are these contracts negotiable, but it is in your best interest to have an attorney who specializes in severance agreements review it.
Rules Regarding Severance Agreements
While there are no laws forcing employers to provide severance to their employees, there are rules regarding how they are to be carried out. For example, anyone being terminated over the age of 40 years old, by law, has to be given at least 21 days to consider the offer and 7 days to revoke his or her signature.
Essentially a severance agreement has 3 parts that both parties are agreeing to.
- Termination of employment
- Severance (payments, lump sum, benefits, etc.)
- A general release or waiver signed that releases the employer from any lawsuits or claims
In order for the validity of this agreement and waiver to be legally upheld, the employee must knowingly and voluntarily consent to the agreement and sign. According to the EEOC, when questioning whether or not a waiver was signed knowingly and voluntarily, the court would look at the following circumstances:
- whether it was written in a manner that was clear and specific enough for the employee to understand based on his education and business experience;
- whether it was induced by fraud, duress, undue influence, or other improper conduct by the employer;
- whether the employee had enough time to read and think about the advantages and disadvantages of the agreement before signing it;
- whether the employee consulted with an attorney or was encouraged or discouraged by the employer from doing so;
- whether the employee had any input in negotiating the terms of the agreement;
- And whether the employer offered the employee consideration (e.g., severance pay, additional benefits) that exceeded what the employee already was entitled to by law or contract and the employee accepted the offered consideration.
As a laborer whose employment is being terminated, you should take into consideration how long you could possibly be unemployed and the effects it could have on you and/or your family. If you accept a severance agreement, you do not qualify for unemployment benefits until the severance runs out. Allow our attorneys to review your agreement and negotiate the terms on your behalf to secure your future. Call JML Law offices today in Long Beach at 818-610-8800 or visit our website at www.jmllaw.com to request a consultation with one of our severance agreement attorneys.
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