Severance isn’t just a gift from your employer—it’s a legal contract designed to protect their interests
Being let go from your job is never easy, but severance can soften the blow. When you’re faced with the prospect of losing your income, it can be tempting to take whatever your employer offers and move on.
However, accepting a severance package without fully understanding its terms can have serious consequences. Here’s why you should always talk to an attorney before you accept a severance offer.
Why do employers offer severance?
Generally speaking, employers aren’t required to offer severance. If you have a contract, there might be severance provisions in the contract that the employer must honor, but otherwise, it’s the employer’s choice. There are a few reasons why employers might decide it’s in their interest to offer severance when firing or laying off employees:
- Protect the company’s trade secrets and proprietary information: Severance often comes bundled with a non-disclosure and/or non-compete agreement meant to guard the company against competitors.
- Maintain morale and goodwill: Employers may offer severance packages to demonstrate to their remaining employees that they will be valued and supported throughout their tenure. Furthermore, some employers like to cultivate a strong network of “alumni” who can refer them future business or recommend new talent.
- Avoid litigation: This is perhaps the single most common reason employers offer severance. Severance packages almost always include provisions that release the employer from legal liability for wrongful termination or other employment-related claims.
The point is that employers don’t just offer severance because they want to be nice; they offer it because they want something in return. That means you may have more leverage than you think, and you may be able to use that leverage to your advantage.
How an attorney can help you decide whether to accept a severance package
- Review non-compete and non-disclosure terms: Again, many severance packages come with a non-compete or non-disclosure agreement. An attorney can evaluate the terms of that agreement and explain how it might affect your ability to obtain future employment.
- Evaluating potential lawsuits: Some severance packages contain a release of liability as boilerplate language. If you actually have a viable legal claim against your employer, though, the value of that severance package should be much higher to make it worth your while. An attorney can evaluate any claims you might have that would give you leverage in negotiations with your employer.
- Negotiating on your behalf: An experienced employment attorney can negotiate with your employer to try to obtain a more favorable severance package, while you focus on finding your next job or otherwise moving forward.
- Providing an objective perspective: It’s normal to be frustrated or otherwise have strong emotions related to losing your job. One big advantage of working with an attorney is that we can look at the situation objectively to protect your long-term interests.
Before you sign a severance agreement, contact our law firm
The experienced employment attorneys at Gibson Law, LLC, know how to advocate for Ohio employees navigating job transitions. Make sure your rights and interests are protected. Give us a call or contact us online to schedule your free case evaluation.
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