Is your employer laying off employees? Or maybe they are restructuring the organization? Either way, you might be offered a severance package.
A severance offer isn’t just a document. And it certainly isn’t always a gesture of goodwill. In fact, a severance offer could be hiding a lot, and it’s so easy to miss the finer details. The latter is particularly true during such a stressful time. You won’t be blamed for not thinking clearly.
But this doesn’t mean you shouldn’t take precautions. You must review the offer fully, and this might mean asking for legal help. Fortunately, there are options for Milwaukee counsel for severance issues, so you will definitely not be alone.
That doesn’t mean you shouldn’t do your own research, though. It is critical that you know what to look for. Keep reading on to learn three key aspects to keep in mind.
The Release of Claims (What You Are Waiving)
Now, this one depends on your time at the company. Some workers will have had zero issues with their employer, and this means they have no grievances. The problem arises when you have had a past workplace issue.
Signing the severance agreement complete waives your right to sue your employer. This means you cannot bring a future lawsuit in relation to your employment, termination, or workplace treatment. And yes, this has a very broad coverage – even including harassment, retaliation, workplace discrimination, and wrongful termination.
Once signed, all negotiating leverage is lost.
There are certain factors that you must look at before signing here. For one, you want to ensure it is mutual – they cannot sue you and vice versa. You also shouldn’t be stopped from filing a charge with the EEOC, applying for unemployment benefits, or whistleblowing.
Restrictive Covenants (How It Affects Your Next Job)
Restrictive covenants must be kept in mind. Why? Because they directly dictate where, for whom, and how you can earn a living after you leave the company. This has the power to impair your long-term career prospects if signed, despite the severance package offering short-term financial security.
While the right to sue your employer is the right most commonly given up, employers will usually insert or reaffirm post-employment boundaries. The one you should be most aware of is the non-compete cause. This restricts you from working for a direct competitor or opening a competing business.
In such a case, you should evaluate the severance offer. Look at the duration and the geographic scope mentioned. This will ensure you aren’t completely blocked from working in your field in the future.
But there are also non-solicitation clauses and non-disparagement and confidentiality to be aware of. These – including the non-compete – are deemed “high-impact restrictive covenants.”
Legal Deadlines and Review Periods
Severance offers have timelines. They are typically very strict. If ignored, such timelines will favor the employer heavily. As a result, you must be in-the-know.
US law protects your right to think over the offer. There is no need to sign right away – and you really shouldn’t. For example, if you are 40 or older, your employer must give you at least 21 days to review the severance agreement. This is under the Age Discrimination in Employment Act. Similarly, there is no federal minimum for those under 40, although employers usually offer one to two weeks.
Missing these deadlines will have harsh consequences. Your employer could legally withdraw the money entirely. You would lose your negotiating power, so you’d lose the chance of higher pay or extended healthcare benefits.
To conclude, signing a severance offer is not something to rush. You must take your time. Review the terms. Seek help. Negotiate. Only by doing this will you receive the most compensation.