Severance Agreement Quick Discussion

What is a Severance Agreement?

A severance agreement is a contract between an employer and an employee that outlines the terms of the employee's separation from the company. Severance agreements typically include provisions for severance pay, continuation of health insurance benefits, and non-compete clauses.

Why Do Employers Offer Severance Agreements?

There are a number of reasons why employers might offer severance agreements to their employees. For example, employers may offer severance agreements to:

• Attract and retain top talent. Severance agreements can be used to sweeten the pot for job candidates who are considering other offers.
• Encourage employees to leave quietly. Severance agreements can be used to encourage employees to leave the company without making a fuss. This can be helpful for employers who are trying to avoid negative publicity or lawsuits.
• Reduce legal liability. Severance agreements can be used to release the employer from liability for certain claims that the employee may have. This can be helpful for employers who are concerned about being sued by their former employees.

What Should You Consider Before Signing a Severance Agreement?

If you are offered a severance agreement, it is important to carefully consider the terms of the agreement before signing it. Some of the things you should consider include:

• The amount of severance pay. The amount of severance pay you receive should be based on your salary, years of service, and other factors.
• The continuation of health insurance benefits. If you are receiving severance pay, you may also be eligible to continue your health insurance benefits through the company's COBRA program.
• The non-compete clause. A non-compete clause is a provision in a severance agreement that prohibits you from working for a competitor for a certain period of time. If you are considering signing a severance agreement with a non-compete clause, be sure to understand the terms of the clause and whether or not it is reasonable.

What Should You Do If You Are Offered a Severance Agreement?

If you are offered a severance agreement, it is important to consult with an employment attorney before signing it. An employment attorney can help you understand the terms of the agreement and negotiate for the best possible terms for you.

Conclusion

Severance agreements can be a valuable tool for both employers and employees. If you are offered a severance agreement, it is important to carefully consider the terms of the agreement before signing it. An employment attorney can help you understand the terms of the agreement and negotiate for the best possible terms for you.

This blog does not constitute legal advice. By reading this blog you are not creating an attorney/client relationship with North Coast Legal, PLC. An attorney/client relationship is established once you and North Coast Legal, PLC have entered into a retainer agreement for services to be rendered.