Think about all those envelopes you have received in the mail throughout your life, promising that, if you take a simple action, a large amount of money will come to you. In most cases, you never got the money that these pieces of correspondence promised that you would get. Some of them were offers for high-interest loans that you probably did not qualify for anyway. Even if you did receive the money, you would end up repaying much more than you borrowed. Others were offers for sign-up bonuses that required you to buy expensive products you did not need, usually on a subscription basis; in other words, you could get a little bit of money in exchange for paying a lot.
Early in your tenure as a recipient of postal mail, you might even have gotten some chain letters that promised you untold wealth if you would only copy the letter by hand and send it to 15 recipients in the next week. Most likely, you showed the letter to an adult family member, who talked some sense into you before you followed the letter’s instructions. Imagine your surprise, then if your employer hands you a letter, offering you thousands of dollars, and all you have to do is make yourself scarce. The Bozeman severance review lawyers at HKM Employment Attorneys LLP can help you if your employer offers you a severance agreement.
What is a Severance Package?
A severance package is compensation that an employer pays to an employee when the employer terminates the employment relationship. It typically includes money equal to several months of the employee’s salary, either paid as a lump sum or in monthly installments. Severance packages also include an extension of the employee’s employer-provided health insurance benefits. If the employee relocated to Montana for the job, the severance package might also include a stipend to cover the employee’s expenses for relocating to the place from which he or she moved before beginning work.
In most cases, the employee must sign a separation agreement as a prerequisite for receiving the severance package. The separation agreement stipulates that the employer will pay the severance package, and in return, the employee waives the right to file a lawsuit arising from the termination of the employment relationship. Separations tend to imply that the employee is not at fault for losing the job, but that he or she still cannot sue for wrongful termination of employment.
How Do You Know If You Are Entitled to Severance Pay?
Severance pay tends to be a unilateral decision by the employer. In at-will states, employers have the right to fire employees whenever they choose, with or without notice, and they do not even have to provide a reason; only employees who have an employment contract are safe from this arbitrary behavior by employers. Luckily, Montana is not an at-will employment state. Instead, we have the Wrongful Discharge from Employment Act. This Montana law requires employers to cite a legally valid reason for firing an employee who has passed the probationary period. It does not, however, require employers to pay severance. Employees hired without contracts and fired on the employer’s initiative do not always get severance pay. If your employer asks you to sign a separation agreement, it means that the employer is worried that you will sue. Therefore, if your separation agreement does not include severance, it is worthwhile to negotiate until your employer offers you severance pay, since paying you severance will cost the employer less than defending itself against a lawsuit.
If you have an employment contract, it will probably contain provisions about compensation that the employer owes you if the employer terminates your employment before your contract expires for reasons other than breach of contract on your part. In other words, some employment contracts come with severance provisions built in. If you have just been offered a job with a contract, you should read your contract carefully with a lawyer before you sign, to see what, if anything, it says about severance pay. Even if the employment contract does not contain any provisions about severance, employees who have contracts are more likely to receive severance offers than employees hired without a contract.
Always Review a Separation Agreement Before You Sign It
If you are old enough and have sufficient professional experience that you are a party to a separation agreement, then you are probably wise enough to know that nothing in this world is free. Despite this, many employees hastily sign their separation agreements so they can get their severance pay as quickly as possible because the separation agreement comes to them in a moment of financial panic. Employers are capitalizing on the fact that you are stressed out about the fact that you are losing your job, whether the news of your layoff comes as a complete surprise or whether you have been watching, with increasing anxiety, as your employer’s financial situation has grown worse over the past few months or years.
No matter how desperate you are for the money, and even as your mind has become a flowchart of other income streams you can pursue now that you have lost your job, do not sign the separation agreement immediately. Instead, contact the Bozeman employment lawyers at HKM to review the separation agreement with you, so you can identify points where you want to negotiate for better compensation, or perhaps even decide that losing your job without severance pay is a better option than waiving the right to sue.
What If the Severance Offer is a Cover for Something More Insidious?
Separation agreements, even if they come with ostensibly generous separation packages, can be an attempt by employers to protect themselves from litigation. You should not sign a separation agreement or accept a severance package if your employer terminated your employment for discriminatory or retaliatory reasons.
Contact HKM Employment Attorneys About Severance Packages
The Bozeman employment lawyers at HKM Employment Attorneys LLP can counsel you about problems that might arise from your separation agreement, even before you sign it. Contact the employment lawyers at HKM Employment Attorneys LLP in Bozeman, Montana, to set up a consultation.
