Severance Agreements Basics

Posted by Jacob I. Kiani | Dec 27, 2013 | 0 Comments

A severance agreement or separation agreement is a legal contract between an employer and an employee that specifies the terms of an employment termination. Typically, a severance agreement offers to pay a sum of money or term of continuation pay in exchange for a waiver or release of legal claims that an employee might otherwise bring against the employer.The severance package negotiations attorneys at the Law Office of Jacob I. Kiani have significant experience negotiating severance agreements with employers. Employees facing the end of their employment have a variety of concerns, concerns not only with the amount of severance being offered but also with whether or not the terms of the separation agreement being offered will be favorable for the employee or, rather, whether they will unduly restrict the employee from earning a living in the future. A good severance agreement can provide an employee an effective transition to new employment. Severance agreements should be carefully reviewed to ensure that the entire package is a good deal for the employee.

Employee Termination & Severance Agreements

As with any legal contract, a separation agreement must be supported by legal "consideration," that is, the provision of some benefit to the employee in exchange for a release. A severance agreement may not be binding on the employee if it only entitles the employee to payment of something she or he is already entitled to, such as pay or retirement benefits that the employee already earned. An example of consideration would be payment of a portion of the employee's annual salary or payment of salary for a specified time after termination.

When successful, a severance negotiation can mean a positive result in difficult circumstances. A good severance agreement could mean payment of a significant amount of income, of extended benefits such as health or life insurance, of payments of bonuses or commissions to which the employee may not otherwise be entitled, or additional contributions to a tax deferred retirement account.

A negotiated severance agreement may also "manage the message" by negotiating and arriving at the manner and substance by which co-workers, customers, and future employers will be informed of the employee's departure. Representation by an experienced attorney may help provide real improvements to the agreement, more beneficial monetary terms, and peace of mind that the agreement will not harm the employee in the future.

At the same time, successful negotiation of a severance agreement may keep out provisions that are harmful to the employee. At times, employers may attempt to add conditions to a severance agreement that limit the employee's ability to find competitive work, even if those restrictions would not be imposed absent an agreement. Other harmful clauses may include penalties for non-disparagement or breach of confidentiality, indemnification over tax treatment of payments, or provisions that may restrict the employee's ability to be re-employed with the employer.

Federal civil rights laws also provide protections for an employee to allow for sufficient time to consider the severance agreement, allow the employee to file claims with the Equal Employment Opportunity Commission (EEOC), and protect against a waiver of any right to assist others with discrimination claims against the employer.

Severance Agreement Lawyers in LA

If you are being terminated, or if you have been presented with a severance agreement, the lawyers at the Law Office of Jacob I. Kiani can help you interpret the agreement and all of its implications. We may also negotiate your severance agreement with your employer, ensure that your agreement is fair and beneficial to you, and make sure that no part of the agreement will harm you in the future.

Contact our severance negotiation attorneys to find out more information on severance negotiations and severance agreement laws.

About the Author

Jacob I. Kiani

Jacob I. Kiani is an experienced and highly-skilled Los Angeles Labor & Employment Attorney. The Law Office of Jacob I. Kiani is a Labor & Employment Law Firm located in Los Angeles, California. The firm assists clients throughout Los Angeles, Hollywood, West Hollywood, Downtown Los Angeles, Beverly Hills, West Los Angeles, Orange County, and the San Fernando Valley with legal matters related to Labor & Employment Law, Wage and Hour Law, Unpaid Wages Law, Overtime Law, Meal Period and Rest Break Law, Business Law & Litigation, Technology Law, Human Resources Law, Severance Negotiations Law, and Unbundled Legal Services.