Severance agreements are voluntary agreements made between an employer and an employee at the end of the employment relationship. The employment relationship can end due to a reduction in force ("layoff"), termination ("fired"), or even in some cases resignation ("quitting"). Severance agreements are usually binding, written contracts. The terms of a severance agreement can vary widely, but generally consist of the employer agreeing to pay the employee a certain sum of money and the employee agreeing to release the employer from any legal liability. Other common terms include confidentiality, non-disparagement, no re-hire, and a mutual release of liability.
Many severance agreements allow the employee to have seven days to review the agreement before signing it. Many severance agreements also allow the employee to change their mind and back out of the agreement up to 21-days after signing the agreement. This is because the Older Workers Benefit Protection Act requires these terms for certain employees to waive their possible age discrimination claim.
A severance agreement cannot require you to give up your right to file a charge of discrimination with the EEOC or Washington State Human Rights Commission. Violating this principle may be a form of retaliation under the employment discrimination laws. Severance payments may affect your eligibility for unemployment benefits.
If you find yourself asking questions like
- Should I ask for a higher payment?
- Is this release too broad?
- Do I have a viable employment claim and should I release it?
- Will this affect my unemployment benefits?
Then you should consult with a professional. Contact Pechtel Law now to schedule a consultation.