Depending on the circumstances of your employment, there is a chance you may be offered a severance agreement if you are ever fired or laid off. This agreement lays out a number of critical factors related to the termination of your employment, any and all of which are potentially up for negotiation. Here are seven important terms you should know in your severance agreement:
- Severance pay
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- One of the most basic terms of the severance agreement, this term determines what you will be paid as part of the severance package. This can vary depending on a number of factors, including previous salary and length of employment, and may be paid as a lump sum or in installments over time.
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- Continuation of benefits
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- Many severance agreements will allow an employee to retain certain benefits from when they were employed. This may include things like access to employer health insurance policies, or compensation for unused sick or vacation time.
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- Release of claims
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- Typically, a severance agreement will include this term, which requires the employee to give up any ongoing legal disputes with their employer. This is a particularly important term where the employee’s termination is potentially related to a labor or employment dispute.
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- Non-disclosure agreement
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- Also known as a confidentiality agreement, this is an agreement not to discuss any confidential or sensitive information the employee learned while they worked for their employer. This includes things like confidential client information, or trade secrets related to the employer’s products or services.
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- Non-compete agreement
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- A severance agreement will often have a non-compete clause, which requires the employee to avoid competing with their employer in their own market for a certain period of time. This includes working for a rival company, or starting up their own company in the same industry and location as their former employer.
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- Non-disparagement clause
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- This clause is an agreement between the employer and employee not to say negative things about each other after the termination of employment. This includes making public statements, talking about them on social media, and may potentially even include references for future employment.
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- Arbitration clause
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- This type of clause is meant to come into effect if there is any legal dispute over the severance agreement, forcing the dispute into private arbitration. This clause also typically dictates what arbitration company would hear the case, and who will bear the costs of the arbitration.
If you have an employment issue, give the Law Office of Andrew Ross Sack a call. Andrew Ross Sack is a New York and New Jersey employment lawyer who has considerable experience in handling the many aspects of labor and employment law. To schedule a consultation with New York City/Long Island/Westchester employment lawyer Andrew Ross Sack, call (516) 526-3319 or visit his contact page.
