Unfortunately, layoffs happen and oftentimes come as a complete surprise to those affected. Layoffs also oftentimes come with a severance offer.
Sometimes an employer just offers up the severance free and clear without the employees who have been laid off having to do anything at all to receive it. However, this is not the norm. More often getting the severance is made contingent on the employee signing a severance agreement.
Severance agreements are legal documents and can be incredibly complicated and confusing and leave employees wondering what to do. On the one hand, an employee who has just lost their job clearly wants the money. But on the other hand, that employee may be concerned about what they are giving up in exchange for that money. They also may be wondering if they can get more money. The best way to know for sure is to consult with a Texas Employment Lawyer.
Why were you terminated?
The legitimacy of the layoff is one of the first things an employment lawyer is likely going to analyze before advising you on your severance agreement. Sometimes, employers attempt to cover up discrimination by calling a termination a layoff when in reality it is really just a termination. Additionally, even if the overall layoff is for legitimate business reasons, the layoff selection process can still be done in a discriminatory manner if an employer is selecting the workers it is going to layoff based on their race, religion, national origin, sex, age, or some other protected categories.
Overall, anytime there is a severance offer on the table, layoff or no layoff, the circumstances surrounding the termination are crucial to understanding the severance agreement and providing legal advice.
What you may be giving up
Obviously, what an employee is giving up when they sign a severance agreement ultimately depends on what the agreement says, which is why it is so important to review the documents with an attorney prior to signing. But, generally, the most important thing an employee is giving up when they sign a severance agreement is their right to pursue any legal claim they may have against their former employer.
Typically, a severance agreement will contain what is called a general waiver and release. The release is meant to be as all-encompassing as possible. Keep in mind, the employer’s lawyers drafted the agreement to protect the employer, not the employees who are being let go. Accordingly, by signing the agreement, workers are likely waiving any and all legal claims they may have against their former employer, both known and unknown. Unknown! That’s right, even potential claims the employee does not know about can be subject to the waiver.
The waiver of claims is why the context surrounding the termination is so important. If you likely have no legal claim, then you are not giving up as much up as you would be if you did potentially have a claim. Of course, there could be claims not related to the termination as well, so make sure you bring up any potential concerns with the employment lawyer who you review your severance agreement with.
In addition to the waiver and release of any potential legal claims, severance agreements typically contain a lot of other terms as well. Some of these terms can be particularly important to understand prior to signing a severance agreement because they place restrictions on what the employee can do if they sign.
One of the key provisions that restricts what a worker can do after signing a severance agreement, one that is almost always present, is a confidentiality provision. A confidentiality provision prohibits the employee from discussing the existence of the severance agreement with others. Some agreements may also contain a non-disparagement provision. A non-disparagement provision prevents the employee from saying bad things about their former employer.
Overall, it is important to review any severance agreement with an experienced Texas Employment Lawyer prior to signing so you understand not only what you are giving up but also what you can and cannot do after you sign. It is important to understand what could result in the company down the road trying to say you breached the agreement and owe them money.