Severance contracts are important for many employees. These contracts provide protections for the employee, but they also serve an important purpose for the employer. It is essential to ensure that everything in this contract is up to par. If there is anything that you are unsure of, don’t sign it and take the time to have someone else review the contract with you.
There is often a clause in the severance contract that relieves the employer from any future legal claims. This means that if you have anything that you are concerned about, you should think twice before you agree to a severance. Employers often include this protection as a matter of course and not necessarily only when they think that there might be a claim forthcoming.
In exchange for the relief from future claims against the employer, the employee will get a severance package. This could include a host of things, but most commonly will include monetary compensation for the employee that can help you to get through financially until you are able to find a new job.
It is possible that there could be a non-compete clause in the severance contract. This would prevent you from being able to work for a competitor for a specific amount of time. Make sure that there is a definite end to the non-compete agreement. Also, make sure that the time isn’t an exorbitant amount of time.
Other clauses might also be present in these agreements. As you look through the contract, make sure that you understand exactly what you are signing. Know what your compensation package is getting, as well as what your responsibilities are.
Source: FindLaw, “Sample Employment Termination Contract,” accessed July 05, 2017