Navigating Severance Agreements
Businesses handle the risk of lawsuits in response to employee termination by offering severance packages. Since the law does not obligate employers to offer payment to terminated employees, the extension of a severance agreement to an employee represents a chance for both the employee and employer to benefit. Therefore, navigating severance agreement can be difficult for businesses.
Drafting a severance agreement requires the legal insight of a business lawyer because a lawyer knows from experience what common areas that employees file complaints against employers. Moreover, a business lawyer crafts a severance agreement that reflects your unique business, possible liability issues, and employees. Since the protections and benefits offered by a well-written severance agreement have the ability to impact a business, working with a lawyer secures a positive outcome for all involved.
This For That: The Severance Agreement
Although not always, a severance package often represents a legally intelligent decision on the behalf of a company when terminating protected employees. In most cases, the severance agreement is a this for that situation. After all, an employee with a potential complaint might drop the complaint if he or she receives a decent severance agreement. With that said, ensuring that the document covers all possible liability issues further protects the relationship between employer and employee. Naturally, partnering with a business lawyer to create these binding documents is in the best interest of all parties.
This: Potential employee complaints
Due to employment law, employees receive the right to file complaints with the Equal Employment Opportunity Commission (EEOC), the Pennsylvania Human Relations Commission (PHRC), or with state or federal courts.
- FLSA wage violations
- FMLA medical leave violations
- Sexual harassment
- Age, disability, race, and sex discrimination
- Under federal law, these claims are filed with the EEOC
- Under Pennsylvania state law, these claims are filed with the PHRC
That: Severance packages
A severance agreement offers employees the security of severance pay after job termination along with certain other benefits that a company might offer.
In most cases, a severance package comes hand-in-hand with a severance agreement, requiring agreement from the employee before he or she receives severance pay.
- Release of claims – employees receiving severance must release any and all legal claims they might have against the business
- Transition period – employees sometimes agree to assist with a transition in order to receive severance funds
- Non-competition – employees may be required to agree not to solicit customers from the business or compete directly with it
Since severance agreements are unique to each company, a business lawyer customizes the legal documents to the company’s specific needs. Moreover, a business lawyer evaluates possible claims an employee might bring along with the risk of exposure to liability. Contact us because we can help you create severance agreement and evaluate risk factors for termination and severance agreements.