While there is no state or federal law that requires employers to offer former employees a severance, it is not uncommon for a severance package to be offered to certain employees who have been terminated or laid off. A severance payment is most often made in exchange for a former employee’s release of any and all claims that he or she may have against the employer. However, the fact that a severance has been offered does not indicate that the employer has done anything wrong, and it rarely can be used as any sort of evidence of wrongdoing against the employer. When a severance is offered, it will be provided for in a written agreement that is most likely titled one of the following: Separation Agreement, Severance Agreement, or Release Agreement.
What am I giving up in exchange for signing a Severance Agreement?
Without seeing the actual document, it is impossible to know or suggest exactly what you may be releasing in exchange for your severance payment. However, generally speaking, the majority of severance agreements contain relatively standard release language that will release virtually all claims that you may have against the employer. This will almost certainly include discrimination and retaliation claims under both state and federal laws (e.g. Chapter 21 of the Texas Labor Code and Title VII of the Civil Rights Act of 1964), as well as claims for breach of contract, negligence, and assault. Before signing a severance agreement, it is important to understand what claims, if any, you may have.
Is it possible to negotiate a Severance Agreement?
Like any negotiation, it is subject to both parties being willing to participate in the process. There are a few ways that you may be able to negotiate a severance.
- First, you can argue from a strictly fairness standpoint that the severance payment should be higher, or that certain terms should be added/amended to the agreement. This obviously is not a great bargaining position to be in. The next two options for negotiating a severance are most successful when presented through an employment attorney.
- You can attempt to negotiate a severance based on contractual language between the employee and employer. For this to work, there must have been a verbal or written agreement between the parties stipulating what severance will be paid upon the employment separation.
- Finally, employers are oftentimes (although not always) willing to negotiate a severance based on the threat of some valid legal claim against the company. These are most often discrimination and/or retaliation claims, but must be evaluated on a case by case basis.
Regardless of whether or not you believe you have a legal claim against your former employer, you should always attempt to have an attorney review a severance agreement before you sign. An attorney can advise you of any concerns related to the language in the agreement, and also let you know if there is any basis for potentially negotiating.
For more information contact an employment attorney to see what options may follow a severance agreement.
