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New Jersey Association of Justice
American Bar Association
National Employers Lawyers Association

Severance Agreements

Severance Agreements

Have you been offered a severance agreement that your employer is asking you to sign as a result of your employment being terminated? Do you believe your employer has terminated your employment unlawfully and is attempting to have you sign a severance agreement to prohibit you from filing a lawsuit for wrongful termination. The New Jersey Employment Lawyers at Smith Eibeler, LLC routinely review severance agreements and provide advice and counsel to clients regarding their rights and obligations when executing severance agreements with their former employers.

There are many things to consider when deciding on whether to sign a severance agreement, reject a severance agreement or attempt to negotiate a better severance agreement. In most cases, the initial draft or form severance agreement is written to your employer’s advantage, not the employee. To mask this reality, the severance agreement will most likely offer the employee a sum of money in exchange for agreeing to all the terms and conditions set forth in the document. Many employees will choose to take the money without understanding exactly what they have signed and the obligations that they may have in the future as a result of signing the severance agreement.

On the flip side, it is important for an employee to fully understand all their options and determine whether they have any leverage before rejecting a severance agreement and trying to negotiate more favorable terms or more money. The employee should realize that if they choose to attempt to negotiate a better deal, the effect may be rejecting the offer and jeopardizing the former employer’s willingness to give the employee any severance pay. The reality is that a New Jersey employer is under no legal obligation to provide a terminated employee any severance pay just as the terminated employee is under no obligation to sign a severance agreement after they have been terminated.

In most cases, the biggest reason why an employer is offering a terminated employee severance pay in exchange for the employee agreeing that he or she will not sue the employer for unlawful termination or some of other legal cause of action. However, there can be over less subtle terms such as a non-solicitation clause, confidentiality clause, restrictive covenants, no-compete clauses, non-disparagement clauses and other terms and conditions that can significantly restrict the employee’s ability to obtain new employment. These terms can have long term effect on the employee’s economic future.

With all this in mind, it often may makes economic sense to have a New Jersey employment attorney review a terminated employee’s severance agreement so that he or she gains a full understanding as to what they are signing and the obligations that they will have a result of executing the severance agreement. If you have been offered a severance agreement and want to speak to one of our New Jersey employment lawyers about the specific terms and conditions of the severance agreement, please contact us to schedule a legal consultation.

DISCLAIMER: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.
Client Reviews
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We had a wrongful termination issue combined with a denial of unemployment insurance. Chris Eibeler was our primary attorney. His partner Bob Smith also consulted and gave us good advice. They were both so kind, caring, and professional. They guided us though a very tough time and a positive outcome versus a prior employer. They were also able to reverse our denial of unemployment insurance. I cannot recommend Smith and Eibeler highly enough. The entire staff is very professional, personable, and caring. Tom Wilson
★★★★★
I went to Smith Eibeler LLC for a last minute unemployment matter. Chris, Diane and his staff were very professional and easy to talk to. They provided knowledgeable insight and also kept me in the loop with the what was happening. I would not hesitate to go to him again. John Jung
★★★★★
Chris Eibeler (and the whole team) is very knowledgeable in all aspects of employment/unemployment here in NJ. They break down the most difficult aspects of the law, which allows you to conceptualize and better understand the complexities of the NJ Labor & Employment system. Smith Eibeler should be your first call regarding any Employment, workforce, or Labor questions here in New Jersey. I highly recommend them. Brian Allen
★★★★★
I approached Chris Eibeler regarding an unemployment case in early 2016. Him and his staff are some of the most professional people I have ever dealt with. The process took a while, but his approach to hard questioning helped me win my case. He knows how to get the job done and I am glad I went to him. I would recommend him to anyone in the future who asks for a lawyer. Thank you Chris! Tim F.
★★★★★
I highly recommend the office of Smith Eibeler for employment related issues, particularly anything related to restrictive covenants or post-employment contracts. I found Smith Eibeler via the web and cannot believe how fortunate I am to have found them. My case was handled by Bob Smith who represented me in a potential lawsuit by my former employer for violation of a post-employment contract (not a restrictive covenant per se). Bob was professional, friendly, understanding, and above all extremely helpful. Bob helped me avoid a lawsuit and was extremely knowledgeable in this field. I was thoroughly impressed with his prowess. Hopefully I will never have a legal issue related to employment again, but if I do, I will not hesitate to retain Smith Eibeler again! Gavin Tully

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