A severance agreement can be a good thing—but not always as good as it looks at first glance. Many employees will take a severance package for the immediate money it promises, only to regret it later as they see how it negatively affects their job hunt or independent work. If you are ever presented with a severance offer, hold off on signing it until you talk to an experienced employment lawyer at Schorr & Associates, P.C. Why? Here are four reasons:
- The fact that itis being offered at all means the company believes they “owe you” – In most industries, severance agreements are the exception, not the rule. That means that if a company does offer a severance package, there is a reason behind it—they feel that they “owe you” in some way. This may be because your termination was abrupt, because they believe there could be potential legal issues involved, because your contribution to the company was extraordinarily high, or because of fear of competition. In other cases, they simply want to avoid ongoing unemployment expenses. What all of these reasons have in common is they give you leverage. Severance agreements are rarely a “take it or leave it” option.
- You may be signing away your rights – Severance packages usually come with restrictions, often hefty ones. These may include a period of time during which you cannot go to work for the competition, and cannot create your own company that offers similar products or services to those of your former employer. Bear in mind that these restrictions essentially mean you cannot continue working in your industry, at least for the time being, which can be a serious blow to your career. Thus, you need to consider carefully whether the terms and conditions are really acceptable, even with financial compensation.
- The amount may be negotiable – Frequently with severance agreements, the first offer is not the best one. When you carefully review the severance offer with your lawyer, you may discover that the restrictions are only acceptable in exchange for a higher amount—and when your lawyer negotiates this, the company will often meet your requirements. Alternately, they may reduce or eliminate some of the most restrictive clauses or may agree to pay you more money. Negotiating never hurts.
- You need to understand what you’re agreeing to – Even if you end up accepting the severance agreement as-is, understanding all of your obligations in the agreement is crucial to your career. You cannot risk going to work at a promising new job only to stumble into legal action from your old employer. A lawyer can help you understand everything before you sign.
An experienced employment law firm like Schorr & Associates, P.C. can help you understand your severance offer and negotiate the best deal possible. Contact us today!