SEVERANCE PACKAGES ARE VOLUNTARY AGREEMENTS

Some people who start working for a company opt to do so only when they have a severance agreement in place. This provides them with specific benefits in the event of a termination or other negative employment action. It is imperative to understand what these can do and what you need to do to protect yourself using one.

First, remember that employers don’t have to provide a severance agreement. This is completely optional and can be fully customized to fit the situation when one is used. There are many different conditions that might be included in these.

Second, remember that you probably aren’t covered under the agreement if you voluntarily leave the job. You also likely won’t be able to get the severance package if you are fired for a good reason. If the company downsizes or lays off employees, you would be able to get the package if you are affected.

Third, there are times when a severance is a mutual agreement between the employee and employer. In this case, you should be provided with the benefits package that is included in the severance agreement. Not all situations where a plant closes or when there is a mass layoff will qualify for severances, so you need to find out how your specific situation might be affected by laws.

Finally, remember that some severance packages are contingent upon you not going to work for a competing company. If you are found to break this part of the contract, you might have to repay anything that you received. This is one reason why you must ensure that you understand the terms of the agreement.

YOU CAN NEGOTIATE A CALIFORNIA SEVERANCE PACKAGE

You walk into your office ready for a hard day of work. An hour later, you walk back out into the California morning sunshine with a pink slip.

In between, you sit numb, half listening as your company’s human resources representative tells you when your final paycheck will be directly deposited and the status of your medical insurance. She gives you some papers to sign and get back to the company.

When you lose your job, it is your right to negotiate a severance package, especially if you and your company have an employment agreement in place. If you are over 40 years old and receive a severance package offer, the company must give you three weeks to consider it.

However, don’t let that severance offer sit on your desk for 21 days. You need to review it closely and determine what else you should ask for — especially if you were an executive-level employee.

There are a number of benefits you might be entitled to. Make sure you prioritize them since you won’t win every point. Here are just a few of them.

  • Severance pay: Is this the company’s top offer? Can you get it in a lump sum instead of over time? Will the severance include any bonus money you’ve accrued? Should you die or become disabled before the severance pay has been received, will the company still pay it to you or your heirs?
  • Days off: Does the offer include all the vacation and personal time off you’ve accrued?
  • Stock options: How will the company handle the vesting of your stock options?
  • Outplacement firm: Will the company pay for you to hire an outplacement firm of your choice instead of using one the company provides? This request often can result in a payout of up to $25,000.

No matter how long you are given to sign the agreement, it would be wise to consult with a California attorney who is experienced in handling severance agreements. You want to walk away with the best agreement possible.

CAN I CONTEST NON-COMPETE CLAUSES IN A SEVERANCE PACKAGE?

If your employer terminates you, you may receive a severance package as a part of the process. On the one hand, this is better than the alternative, which is no severance package at all. Depending on the nature of your employment, you may or may not have the right to receive a severance package. On the other hand, you should never accept your severance package at face value without carefully scrutinizing it. This is particularly true when it comes to non-compete clauses, which may seriously affect the type of employment you can obtain subsequent to your termination.

In most cases, the non-compete clause included in your severance agreement merely restates the terms of non-competition that you agreed to as a part of joining the employer in the first place. It is wise to check the terms of your severance against the terms of your employment contract to determine if there exist any inconsistencies you can use to negotiate better terms.

Even if the non-compete clause in your severance agreement is identical or practically identical to the non-compete clause in your employment contract, you may still have grounds to fight aspects of it. Look closely at these three areas within the clause:

  • Geographical restrictions that may keep you from working in your home city or state
  • Field restrictions that may bar you from accepting other work in your field rather than simply a direct competitor
  • Time restrictions that may last much longer than you can accept reasonably

If your severance agreement’s non-compete clause has a scope that is too wide and restricts your ability to work beyond reason, the human resources department of your employer may tailor the terms to something that serves the employer’s interests while still granting you fair opportunity to transition to other employment. If your employer refuses to listen to your concerns, you may need to consider the legal tools you have available to fight this sort of unjust practice in court.

Protecting your rights in the workplace is not only essential for your own well being and success, but also for the well being of all workers. Take great care to address this issue fully for the protection of your own rights as well the rights of many others around you.

Source: Salary.com, “9 Things To Know About Your Severance Package,” accessed June 01, 2018

TERMS OF A SEVERANCE AGREEMENT MIGHT BE UP FOR NEGOTIATION

Some employers announce that job positions are going to be phased out before the people holding those jobs are actually let go from them. When this happens, there is a chance that the person who is being terminated will be able to work out a severance agreement. These agreements are important for the employees because they can provide some measure of financial stability until they are able to find a new job.

If you are being terminated and are being offered a severance package, you need to think about the terms of the package carefully. In many cases, there is room for some negotiation about the points in the agreement. You have to decide what is important to you so that you can work toward terms that help you accomplish your goals.

We understand that this is a difficult time for you. The emotional impact of the situation might be great because you are not only losing a job, you are losing your personal investment in a company. You are losing the financial stability that you’ve worked hard to obtain.

When you are thinking about a severance package, you need to remember that these packages are often a way that an employer can thank you for being a loyal employee. They are usually based on the amount of time you have worked for the company.

If you have any questions about severance packages, such as if you are offered one that is different from what your employment contract stated, you need to get those answered. We can help you find answers and put a plan into place if your employer isn’t providing you with what is due you.

FIND OUT WHAT MIGHT BE IN A SEVERANCE PACKAGE

The news of companies filing for bankruptcy or simply closing their doors brings up the question about what is going to happen to the employees who are losing their job. For some of these employees, there might be a severance package waiting for them. This can also happen even if the business isn’t closing but an employee’s position is being terminated.

A severance package is meant to ease the person into unemployment and help him or her to survive until able to find a new job. In many cases, the actual compensation received depends on the length of the person’s employment with the company. The longer a person has been with a company, the better the benefits in the package.

One of the most common inclusions in a severance package is pay. This is often expressed in a specific formula such as “two weeks’ pay per year of employment” or something similar. You should review your employment contract to determine what type of severance pay you may receive.

Some severance packages also include benefits. These can include continued health insurance coverage for a specified period or continued use of company facilities like gyms for a certain amount of time after the termination. The benefits that will continue should be clearly noted in the contract or severance package offer.

There are some instances in which employers might not want to provide severance packages when they are due to employees. Make sure that you know your rights regarding this because there is a chance that you will have to negotiate a package or take legal action to claim what is rightfully yours.

Source: The Balance, “What to Expect in a Severance Package,” Alison Doyle, accessed April 06, 2018

HAS YOUR CALIFORNIA EMPLOYER ASKED YOU TO SIGN A SEVERANCE DEAL?

The day your boss called you into the office to discuss your current employment started out to be a workday like any other. It definitely didn’t finish that way, however. As you drove home, you could hardly believe you could now count yourself among hundreds of other California workers who showed up for work only to learn their employers were eliminating their positions or that their services were simply no longer needed. Such unexpected news can come as a blow and can be challenging to rise above.

Whether you’d been working for the same company for decades or were there less than a year, you always understood that no job is perfect and no one’s position is 100 percent secure, but you really didn’t think you had to worry about an untimely termination. If things became even more complicated when your boss slid a document in front of you during your meeting and asked you to sign a severance agreement, you are definitely not the first employee to encounter such a request.

Should you sign the dotted line?

Hopefully, you told your boss you’d need some time to think things over since the news of your termination came so suddenly. As with most contractual arrangements, there are potential pros and cons to severance agreements. The following list mentions key factors to keep in mind:

  • Caution is the name of the game when anyone asks you to sign anything in an official capacity. You have every right to make a counter request to take the documents home and read through them slowly and thoroughly before you decide whether to sign on.
  • A major component of most severance deals is that employees must agree to waive their rights to sue their employers regarding any issues pertaining to their terminations or other employment-related actions. Let’s say you think your boss fired you because you are pregnant. If you sign a severance agreement, there is no way to hold him or her legally accountable for wrongful termination even if the situation warrants it.
  • On the other hand, severance agreements are not meant to be one-sided. In exchange for your waiver, your boss must provide consideration. This means he or she must compensate you, either with money, benefits or both.
  • The release of liability you sign is not legally enforceable unless all required provisions are included in the contract.

You may, in fact, determine that the issue at hand is so minor you likely wouldn’t take any sort of legal action anyway because you don’t think it qualifies as unlawful since you know most California employers can hire and fire at will. If this is the case, then an exit contract (as it’s sometimes called) may be something you’re interested in; however, it’s always best to make absolutely certain before putting it in writing.

You can speak to others who have entered such contracts in the past and ask them if they were satisfied or if they had it to do over again, would they sign a second time? There are also experienced attorneys who can review a contract for an employee and provide counsel as to whether it seems in his or her best interests to sign.

UNDERSTAND YOUR RIGHTS WHEN YOUR POSITION IS ELIMINATED

Leaving a job when you don’t really want to is difficult. This is exactly what usually happens when positions are phased out and workers are let go because of that. One of the biggest things that individuals who are in this position worry about is how they will make ends meet when their income stops.

Some employees are fortunate enough to have a severance agreement in their contract for work. When this is the case, you can check your contract to find out what you will receive when your position is eliminated. In the absence of this, you might have to work to negotiate a severance package.

We understand that this is a difficult time for you because you don’t know what the future holds. We can’t predict that for you, but we can work on your behalf to work out a severance agreement. This agreement could mean the difference between you scraping by and being able to take your time finding another job.

There are many things that might be considered in a severance agreement. Money is one of the main priorities, but you also need to think about things like insurance coverage and other benefits. In some cases, you might be able to get your employer to extend these for you so that you can focus on finding new work.

We know that you might be feeling the pressure of an uncertain career path now. We can help to take the legal strain off of you so that you can focus on finding your direction and making plans accordingly.

KNOW WHAT TYPE OF SEVERANCE PACKAGE YOU ARE ENTITLED TO

When you find out that you are losing your job, you need to find out what type of severance package you will get. This is something that you should have negotiated at the time you were hired or promoted. It is imperative that you understand the terms of your contract so you can find out what provisions are there.

If you don’t have a severance agreement in place, your employer might offer you a package. In all cases, even if you have the severance covered in your contract, you have the right to review the proposal by the employer. Typically, you have up to 21 days to review it.

You shouldn’t ever sign a severance agreement unless you understand the terms. These include what your employer is going to do and what you are expected to do. Once you have reviewed the contract fully, you need to decide if you will sign it. If you do sign the severance agreement, you will usually have seven days to change your mind.

There are several points to think about when you are negotiating an agreement for severance benefits. One of these is pay. Most severance packages include one to two weeks of pay for every year you have with the employer. You also need to think about your health insurance, retirement benefits and other benefits. Because continuing health insurance through COBRA is often expensive, you should try to stretch the period your employer will pay for as much as you can.

It is always a good idea to have a second set of eyes review a severance agreement. If you are in this position, taking the time to have this done might be beneficial for you.

Source: Investopedia, “The Layoff Payoff: A Severance Package,” Brigitte Yuille, accessed Nov. 17, 2017

REVIEW A SEVERANCE AGREEMENT BEFORE YOU SIGN IT

You might love your job and wish that you would keep on working at it until you are ready to retire. In some cases, that is exactly what might happen. In other cases, you and the company you work for might have to part ways. When the reason you have to leave is that a company is downsizing or reorganizing, you might be offered a severance package.

A severance agreement is a document that you will need to sign in order to get the severance package. Just like any other document that requires your signature, you shouldn’t sign the agreement unless you have read it, understand each point and agree with the terms.

We understand that you might feel like you need to rush to get the severance agreement signed, but trying to rush might mean that you miss something important. When you are presented with one of these documents, we can review it for you to let you know what points you might need to review again.

Remember, most severance agreements are negotiable. We can work with you to determine what you are willing to settle for in your severance package. From there, we can try to work toward that goal for you.

This is one instance in which you need to think clearly about your goals for the severance package. You also need to think about what points regarding the package are included in a contract that you signed. This could have a big impact on what types of negotiations you are able to conduct regarding the terms of the severance.

DO YOU HAVE A LEGAL RIGHT TO SEVERANCE PAY?

Your company is going to let you go. They’ve been up front about it, so you know it’s coming. They’ve given you a two-week warning. What you really want, though, is severance pay. You know it’s going to take time to find a new job and you need money to keep paying the bills during your job search.

You feel like you’re entitled to severance pay. After all, you’ve been with the company for over a decade. Do you have a legal right to be paid on your way out?

You probably don’t. The Department of Labor specifically notes that the Fair Labor Standards Act (FLSA) does not guarantee this pay and does not require employers to hand it out. Legally speaking, they can terminate your position without giving you a dime.

That said, the DOL does note that severance pay is based on the agreement between an employee and an employer. For instance, perhaps you signed a contract when you took the job that said you would be given a year’s salary if you were laid off. If the company is now refusing to pay out and honor that contract, then you may have a legal case because of the violation of the contract that both parties signed.

So, while the law doesn’t guarantee payment to every employee, it can protect you when your rights are being violated. When a contract is breached, it’s imperative that you understand what legal options you have, what rights and benefits you were granted, and what next steps you should take to ensure that your employer adheres to that contract.

Source: Department of Labor, “Severance Pay,” accessed Aug. 04, 2017