Often when an employer has to terminate the employment of one of its employees they will offer them a severance agreement. To ensure you are not being exploited, it is always recommended that you have it reviewed by an experienced attorney who specializes in severance agreements. Contact JML Law in San Francisco at 415-692-3462 for a free initial consultation. Let our severance attorneys go over the contract to confirm the contract is fair and in your best interest.
What Is A Severance Agreement
A severance agreement is a contract between an employer and an employee upon termination of the employee or their position. 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
These contracts are legally binding and release the employer from any claims you may have to sue for wrongful termination if signed. Severance agreements usually contain a variance of one or more of the following:
- A sum of money based on the time employed
- Continued medical benefits
- Stock options
- Pension, retirement, and 401k options
- Letters of recommendation
Employers are not required to offer severance but will typically draw up an agreement to protect themselves from a lawsuit. Your employer can not force you or rush you into signing a severance agreement. They are required, by law, to give employees a reasonable amount of time for consideration and to consult legal representation.
In order for the validity of this agreement and waiver to be legally upheld, the employee must knowingly and voluntarily consent to the agreement when they 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.
Usually, if you accept a severance agreement, you do not qualify for unemployment benefits until the severance runs out. Take into consideration why you are being terminated, if you are being given a fair payout for how long you may be without work, and what benefits they may temporarily continue. Call JML Law offices today in San Francisco at 415-692-3462 or visit our website at www.jmllaw.com to request a consultation with one of our severance agreement attorneys. Allow our attorneys to review your agreement and negotiate the terms on your behalf to secure your future.
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