The Great Resignation has been getting a lot of press these days, but often it is the employer who initiates the termination of the employment relationship. When you quit your job, you only do so after weighing the benefits of staying against the benefits of walking away. In fact, some employees even use the threat of quitting as a negotiation tactic; after they tell their employers how much money another company has formally or informally offered them, the current employer might even agree to give the employee a raise. When employers let employees go, they might also offer money as a bargaining chip. Offering a separation agreement can blur the lines between a layoff and firing an employee. Most employees sign separation agreements as soon as they are offered because they think their only choices are to accept the money the employer offers or to walk away empty-handed into the unknown. As with any legally binding agreement, it is important to read the fine print on a separation agreement and not to make hasty decisions about whether to sign. The Houston separation agreement lawyers at HKM Employment Attorneys LLP can review your separation agreement with you and, if appropriate, can help you negotiate better terms.
How Do Separation Agreements Relate to Employment Contracts?
Some employment contracts indicate the terms on which the employment relationship is to end. For example, the contract might only be valid for a few years, and it might not be renewable; therefore, the employer might give the employee an amount of money equivalent to several months’ salary and a certain amount for relocation expenses to help the employee settle into a new job. Likewise, the contract might state that if the employer ends the employment relationship earlier than the expiration date indicated in the contract, the employer must pay a certain amount in compensation to the employee and must continue to pay for the employee’s health insurance for the rest of the calendar year.
Separation contracts are similar to the end-of-service provisions in employment contracts in that they aim to ease the employee’s transition into another job. The difference is that separation agreements apply when the premature end of the employment relationship occurs on fairly short notice. At least in theory, they are the employer’s response to an emergency.
Why Do Employers Offer Separation Agreements?
In the movie Up in the Air, George Clooney plays an employee of a human resources consultancy firm whose job is to travel around the company and meet with employees to tell them that their employers are laying them off and to go over the terms of their separation agreements with them. One might hope that, in real life, your boss would not be so spineless as to bring in a Hollywood hunk to tell you that you are fired instead of telling you himself, but employers do use the fact that they are catching the employee off guard to their advantage.
An optimist would say that employers use separation agreements to reduce the financial hardship they are causing to their employees when the company itself is in the midst of difficult financial circumstances. A pessimist, however, would say that employers use separation agreements to protect their own financial interests. The more transparent the company has been with its employees about its financial struggles in the months and years leading up to the separation agreement, the more plausible the optimistic interpretation is.
At worst, employers do their best to take employees by surprise and take advantage of the employees’ confusion and panic. What would you do if you went to work expecting a normal workday and you found out that your job was ending at the end of the current month? You would probably start frantically brainstorming other jobs to apply for and making a budget to get you through the next few months until your new job started. You would not even think to ask why your employer was firing you. If you knew that you did not do anything wrong, you would probably take your boss’s word that the corporate layoffs were for reasons beyond anyone’s control. In such circumstances, your employer is counting on you not to ask questions.
Sign, Negotiate, or Sue?
No matter the circumstances, you should always review a separation agreement with an employment lawyer before you decide to sign. As with insurance settlements after a car accident, once you sign to accept the settlement, you waive the right to sue or to negotiate for more money. If you are sure that your employer is firing you simply because they cannot afford to keep you, such as if the entire company is going out of business, then the purpose of having a lawyer review the separation agreement is to ensure that the severance pay and continuing health insurance coverage your employer is offering are fair. If your lawyer thinks you can and should get more money and benefits from the separation agreement, then he or she can help you negotiate for better terms so that you can sign an improved version of the separation agreement.
It is also possible that the separation agreement is just a tactic your employer is using to get you to go away quietly, and the corporate downsizing is just a front for wrongful termination of employment. Did the separation agreement appear on your desk after you complained about discrimination, reported misconduct in your workplace to authorities, or requested an accommodation for a disability? Are there really widespread layoffs in your workplace, or are you the only employee losing your job as part of this so-called restructuring? In this case, it may be best not to sign the separation agreement and to leave the door open to suing your employer for wrongful termination of employment.
Contact HKM Employment Attorneys, LLP About Separation Agreements
The Houston employment lawyers at HKM Employment Attorneys, LLP, can help you review a separation agreement from your employer and decide whether to sign it. Contact the employment lawyers at HKM Employment Attorneys LLP in Houston, Texas, to set up a consultation.