Depending on numerous circumstances, an employee leaving an organization might be asked to sign a severance agreement. It is important to remember that while these agreements historically favor the employer, an employee still has rights and options.
Employers might consider a signed severance agreement necessary as a promise that the employee will not sue the organization. Perhaps the package was put in place during downsizing, layoffs or restructuring. In any event, an employee is wise to remember three things before signing such an agreement.
- Don’t assume you have no leverage: In many situations, an employee who is being laid off is ecstatic they will receive some sort of additional pay after leaving the organization. These individuals are often too eager to sign and secure continued financial stability. However, these documents are written only from the perspective of the employer and will largely benefit the company. In these situations, the company might genuinely be afraid of negative press on social media or the possibility of a lawsuit. Make sure you read the entire document and ask for revisions where necessary.
- Negotiate a better deal: Closely related to the first point, employees should also not be too eager to sign the severance agreement without attempting to negotiate. While elements of a severance agreement are not always negotiable, it rarely hurts to ask. Employees can ask for better terms such as more money, a more beneficial payout duration or relaxed restrictions on a non-compete clause.
- Take your time to read the agreement: Certainly, tied to the other two points is the idea that an employee should take his or her time with the severance agreement. If you have questions, ask them. If you want to negotiate terms, negotiate. Based on certain restrictions, the employer might not allow you to leave the building with the unsigned document, but that doesn’t mean you can’t sit in a conference room and take your time to read through the entire package.
As with many situations centering on employee-employer relations, it is wise to seek legal guidance. An employment law attorney can review your severance agreement and provide the answers you need.