Protecting and Negotiating Severance Agreements
Employers and employees alike may benefit from a severance and release agreement.
What is severance?
Severance pay is money that an employer pays an employee who is being terminated. Severance is usually offered after a reduction in workforce, but it may also be offered to mitigate risk related to various other circumstances such as harassment, retaliation, discrimination, or failure to pay wage claims.
What’s in it for the employer?
Limitation of risk. Many employers utilize severance agreements as a tool for limiting liability and/or reducing potential litigation expenses. By offering severance to a departing employee, the employer obtains a “general release of claims,” which will prevent the employee from filing a civil lawsuit, such as for discrimination, harassment, whistleblower allegations, breach of contract and related matters.
What’s in it for the employee?
Compensation. In exchange for the release of claims (i.e., the promise not to sue), the employer agrees to pay the employee a lump sum or salary continuation at an amount agreeable to both sides.
How and when does it happen?
Although most “at will” employees are not entitled to severance, shortly after termination is the ideal time to request or negotiate a severance agreement as a means to resolve disputes.
Why Kani Law Group?
We have years of experience and a depth of knowledge in employment law. We know what motivates each side. We use that knowledge to maximize the impact of severance agreements for each unique circumstance.
Contact our offices immediately for a free consultation. Employees will not be charged unless we secure severance.