The first thing a tech worker should do when you receive a severance agreement is to call an employment lawyer.
Every employee has the right to speak with an attorney who specializes in severance agreement reviews, negotiations and enforcing employee rights. You might have claims that are worth more than the employer is offering you for giving up your rights.
Only an experienced lawyer can fully assess your situation. Remember, there is no “standard” agreement that you must sign. Many terms can be negotiated.
So, the first thing to do is schedule your severance review and consultation.
Next, look at the agreement and search for the red flags. Start with the big pieces:
- Compensation: The agreement should outline the amount of your final paycheck and any additional severance pay that you’ll receive. This section should include the date of your health and dental benefits cut off, as well as any stock awards or accelerated vesting you might receive and final retirement contribution matching.
- Non-compete and non-solicitation clauses: These provisions may prohibit you from working for a competitor or soliciting the company’s customers or employees for a specified period after leaving the company. Regulators have proposed banning non-competes, but there’s already challenges in the works to keep them alive.
- Confidentiality and non-disclosure agreements: The agreement may require you to keep certain information about the company confidential, such as trade secrets or proprietary information.
- Non-disparagement: The agreement may also address defamation and non-disparagement of the employer. This is not a good time to jump on social media and speak negatively about the employer who just fired you, especially if you are looking to negotiate the terms of a severance agreement.
- Neutral Reference: Make sure the agreement memorializes the company’s obligation to only confirm your dates of employment and last position held to a third-party prospective employer. Many times, this language is included in the hire documents, but it should also be included in any severance agreement.
- Release of claims: The agreement may require you to release the company from any future legal claims, such as discrimination and wage and hour violations. Basically, if you sign the agreement and accept the monetary payment, then you won’t be able to sue your employer.
- Continued benefits: The agreement may detail any continuation of benefits, such as health insurance, after you leave the company.
A few other important things to do when you get the severance agreement or separation package are:
- Verify the timeline for accepting the severance package and the consequences if you do not accept it. Severance agreements should have explicit deadlines by when you must accept the agreement. Depending on the type of termination, employers will give 21 days or 45 days for the employee to consider the terms of the agreement. That’s why you should immediately schedule a legal consultation upon receiving the agreement.
- Check if the agreement includes any obligations for you to return company property or to not retain any company confidential information.
- Compare the severance package with any employment contracts or company policies you may have signed, especially any nondisclosure and confidentiality agreements.
- Check if the agreement states that the severance package is the only form of compensation you will receive in connection with your termination.
- Check if the agreement states if it covers all the severance related issues or if there are any other agreements or documents that you need to sign.
- Check for any provisions regarding the ownership of your work product, including any patents, trademarks, copyrights, and trade secrets developed during your employment.
- Check if there are any provisions regarding the termination of any stock options, restricted stock units, or other equity-based compensation.
During your consultation, the attorney will address these areas and many more. The attorney should also discuss with you events leading up to the termination, even it’s part of a mass layoff. If you have previously brought concerns to HR about discrimination, retaliation, workplace accommodation, or if you’ve made a family or medical leave request, then those are narratives to share in your legal consultation. You may have claims that entitle you to more than the severance agreement offers you.
Contact Potomac Legal Group today if you have received a severance agreement or separation package and need to consult with an expert in severance negotiation and employment law.