Severance Agreement Negotiations

Pospis Law provides representation in connection with the review and negotiation of employee severance agreements.

If you are presented with a severance agreement, it is crucial that you understand what is being offered – and, perhaps more importantly, what you are being asked to give up in exchange – before signing it. We can help you understand the terms of a severance agreement and, in appropriate cases, attempt to negotiate a more favorable severance package.

Many are surprised to learn that New York law does not include a general requirement that an employer pay a departing employee severance pay. Rather, severance pay is usually provided in one of two circumstances: (1) it is a term of the employment contract/agreement, assuming one exists; or (2) a negotiated severance in exchange for a “release” of potential claims.

Either way, most, if not all, severance agreements contain a provision, typically called a “Release”, which (as its name suggests) “releases” the employer from liability for legal claims, such as those arising under the anti-discrimination laws. If there are facts suggesting that you may have one or more legal (e.g., discrimination, harassment, or retaliation) claims, an employment lawyer can evaluate those potential claims, with the goal of negotiating a more favorable offer.

In addition, if an employee is being asked to waive rights under the federal Age Discrimination in Employment Act of 1967 (which protects individuals 40 years of age or older from employment discrimination), the Older Workers Benefit Protection Act of 1990 (OWBPA), which is codified as part of the ADEA at 29 U.S.C. 626(f), imposes additional restrictions. Specifically, the OWBPA requires that a waiver of ADEA claims must be “knowing and voluntary”, and sets forth specific requirements that an employer must meet in order for an employee to waive their ADEA claims. Generally and by way of example, it provides that the agreement must specifically refer to rights or claims arising under the ADEA, give the employee at least 21 days to consider the agreement, and give the employee an opportunity to revoke the agreement for a period of at least 7 days after executing it.

The agreement may contain other provisions and restrictions, such as those relating to your future employment (so-called restrictive covenants such as a non-competition and/or non-solicitation clauses), confidentiality, and non-disparagement.

Please feel free to contact us today to discuss your legal rights.