SEPARATION AGREEMENTS and SEVERANCE

Separation Agreements are a type of contract offered to employees upon a termination.  They usually include a payment to the employee (severance) in exchange for the employee giving up certain rights, such as the right to sue the employer in the future.  They may also require the employee to commit to certain obligations, such as non-compete provisions and non-solicitation provisions. 

 

While employers are generally not required by law to provide severance or separation pay, some employees may contract for severance pay, and many employers may offer a severance or separation agreement even absent a requirement to do so.  Oftentimes these agreements include provisions concerning intellectual property rights and duties relating to confidential information, as well as restrictive covenants and confidentiality and non-disparagement clauses. 

It is important to understand your rights and obligations when signing or drafting any separation agreement.  By signing a separation agreement, an employee usually agrees to release their employer from all claims whether known or unknown to the employee at the time they sign.  The separation agreement may also contain provisions that may make it much more difficult for an employee to obtain future employment.  Employees with valid legal claims also may have leverage to negotiate higher severance amounts and/or more favorable separation agreement provisions.  Employees should consider consulting with an experienced employment law attorney who can help guide through this process.

 

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