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The attorneys S.T. Legal Group are both highly skilled and well-respected in the field of employment. We deal with various aspects of employment law, including reviewing an employer’s severance agreement.
In the hustle and bustle of looking for employment or seeking the most qualified employees for your company, you may pay little attention to what will happen when the employee and employer part company. Nonetheless, without a strong severance agreement, the end of employment can be risky for both parties. Although employers are only required to give their employees severance if such a requirement is stated in the employee’s contract or handbook, many companies voluntarily offer severance at the time the employee leaves.
This is not just a parting gesture. While employees are always happy to receive severance as remuneration and recognition of their past service, employers are looking to avoid costly litigation, competition from a former insider, and the loss of reputation that might result from being disparaged by a former employee.
It is important for employees to be aware that employers are exempt from adhering to most severance agreements if the employee does not give sufficient notice that she or he is planning to leave, or if the employee is terminated for cause (fired).
If you are negotiating the terms of a severance agreement, it is essential to have a sharp employment attorney at your side since such documents have many variables. Like all contracts, in order to be drafted and reviewed properly, they require an experienced, insightful attorney’s attention to ensure that they are clear, legally binding, and crafted to serve your best interests.
Severance agreements cover some or all of the following. As you can see, the agreements are typically designed to protect both the employee and the employer. Whichever role you play, S.T. Legal will see to it that your rights are protected.
Whether an employer is required to pay severance or decides to do so in exchange for employee cooperation, the following issues must be negotiated:
Employees are entitled to continue health coverage under COBRA for up to 18 months after termination (up to 29 months if the employee is disabled under Social Security standards), but the employee must pay the premiums.
This term refers to helping to find another job for employees who are being laid off. Though by no means all employers offer this perk, it can sometimes be negotiated. Some employers will, alternatively, provide the employee with cash to pay for a suitable employment agency or headhunter.
This is the most significant part of the severance agreement from the employer’s viewpoint. The employer wants to ensure protection from being sued by the employee for discrimination, harassment, wrongful termination or anything else related to employment.
Employers also want to be protected against a former employee bad-mouthing them on social media or other public forums. They know that disparaging remarks against their integrity, business aptitude, equal treatment, or working conditions can seriously threaten their reputation and their bottom line.
By the same token, we advise employees to have us negotiate to include a clause stating that positive employee references be part of the severance package. We all know that critical words from a former employer can be extremely detrimental to finding future employment.
Employers, for obvious reasons, want to prevent former employees from luring clients, customers, or staff members away from their company, though a stipulation of this type can only be put into effect for a limited time period — usually 6 months to a year.
Because severance agreements may be negotiated on an individual basis, savvy employers do not want the terms of a particular employee’s severance package revealed — only to be used as a bargaining chip by other employees.
Since the employee leaving the company is, most often, in the same field as the employer, employers want to extract a non-compete covenant from the employee to keep that employee from working for a direct competitor for a certain period of time.
Employees, however, should try to have a list of competitors specified so that her or his job search is not unreasonably restricted.
It is typically in the best interests of both the employer and the employee to agree that if a serious dispute arises around the severance agreement, they will resolve it through arbitration rather than litigation. The former is less costly, less time-consuming, less public, and generally less contentious than the latter, and does not unjustly favor either party.
Whether you are an employer or an employee, seeking us out as your employment attorney is a wise move. While negotiating your severance agreement, We will prioritize your needs as you perceive them. Beyond that, we are likely to make you aware of aspects of severance you may not have considered, as well as loopholes in the document that need to be closed.
You will find that having one of our team members as your legal advocate is immensely reassuring since we will make it abundantly clear that we have all bases covered and will stand by you no matter what. Contact our office today to get started!
S.T. Legal Group employment lawyers represent employers and employees in Deerfield, Lake, and Cook Counties and throughout the state of Illinois.
