Know your rights and protect your interests in severance negotiations
Leaving a job, whether voluntarily or otherwise, is rarely an easy transition. Severance pay can provide a degree of security and assistance during this transition period — but you need to know your rights and remember that you have the ability to negotiate for more.
Here's the first thing to remember about severance: Employers don't offer it out of the goodness of their hearts. Nothing in either federal or Ohio employment law requires employers to offer severance, either. Employers offer severance because they get something they believe is valuable in return, and you need to understand those benefits in order to protect your rights.
Common provisions of severance agreements include:
- Release of claims: This is perhaps the most common reason employers offer severance. Most people who agree to the terms of a severance package partially or completely waive their right to sue their employer, not just for the termination itself, but also for other disputes related to the employment relationship. This may even apply to potential legal disputes that you're not yet aware of. In some cases, you could be giving up the right to pursue significantly more compensation than you're getting in severance pay.
- Non-disparagement: This clause prohibits the employee from criticizing or "badmouthing" the employer after leaving, such as on social media. It's important to understand the terms of a non-disparagement agreement so you don't inadvertently run afoul of its provisions — or find yourself unable to say something you really want to put out there.
- Non-compete: This type of clause prohibits the employee from working for a competitor or starting their own business that competes with the employer. Depending on how broadly or narrowly the non-compete is written, this can have a significant effect on your career. An employment lawyer can review any non-compete provisions, explain the implications, and advise whether they're legally enforceable.
- Eligibility for re-hire: A severance agreement may address whether you are eligible to return to the same employer in the future. Even if you think you'll never return to that employer, it's important to know that you may be closing off future options. In addition, your eligibility for re-hire may come up in a reference check for a future job application.
- References: Speaking of reference checks for future job searches, a severance agreement may also clarify what your now-former employer can and cannot say to future reference checkers. If you left on less than positive terms, it may be possible to get your employer to agree to a neutral reference — that is, confirming dates of employment and job title, and nothing more. Remember, future prospective employers may call all of your previous employers, whether you put them as a reference or not, so even if you plan on using different references, this provision matters.
How an experienced employment lawyer can help with severance
Again, it's important to remember that employers offer severance for a reason. Sometimes, it's just to preserve goodwill and remain competitive in hiring; other times, it's to protect themselves from future liability or competition. Either way, if your employer has something they want out of the severance agreement, that means you may have leverage — you can negotiate for a higher amount of severance pay, longer extension of benefits, or other adjustments to the terms of the agreement.
There are several ways an employment lawyer can help you with a severance agreement. First, we can review the terms of the agreement itself and explain all the implications of what you're signing. If your severance agreement includes a release of claims, we can advise what types of claims you might have so that you can weigh those factors in making a decision. We can draw on our experience negotiating and litigating severance agreements and explain whether the terms are typical for your situation. We can also recommend revisions to the severance agreement that protect your interests.
In our experience dealing with severance agreements, we've found that when emotions run high in a firing or layoff situation, it's incredibly helpful for the employee to have an attorney review the agreement and provide an objective outside perspective. Depending on the circumstances, we can either represent you in negotiations with your employer or advise you from "behind the scenes." Give us a call or contact us online to find out how Gibson Law, LLC can help.