Have you been offered a severance agreement that you 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.