The best-case scenario is that you stay at your job until you have enough money saved that you can afford to retire. The worst-case scenario is that it ends with a dramatic scene of you quitting or your employer firing you, or else one that unfolds over time, but which leaves you an epic hard luck story to tell your friends as you ask them to count you in on their Door Dash order without asking you to contribute money. Many employment relationships end on more ambivalent terms. Perhaps your job is ending because your employer is going out of business entirely, or else closing its Huntsville branch or eliminating the department for which you work.
When it is no one’s fault that the job is ending, employers sometimes offer severance packages to provide employees with an income for several months as they look for a new job. Of course, sometimes, the offer of severance pay is not as generous as it sounds. Separation agreements always come with strings attached, and accepting one is only sometimes a good idea. The employment separation agreement lawyers at HKM Employment Attorneys in Huntsville, AL can help you decide whether to sign a separation agreement if your employer offers you one and, if appropriate, can help you negotiate for better terms of your separation agreement.
When Does Your Employer Have the Right to Terminate?
If you are fortunate enough to have an employment contract, then your employer must continue to pay you until the expiration date of the contract or the end of the contract period. Based on your performance during the contract period, your employer can decide to renew or not renew your contract. Your employer also has the right to terminate your employment earlier than the contract indicates if you breach the conditions of your contract.
Most employees in Alabama, and indeed nationwide, do not have employment contracts. Instead, they are employed at will, which means that the employee is always free to quit, and the employer is always free to terminate the employment relationship. Giving two weeks’ notice before you quit is just a matter of politeness; legally, you have the right to abandon your job without notice. Your employer can fire you for almost any reason; in an at-will employment relationship, firing the employee for discriminatory or retaliatory reasons still counts as wrongful termination of employment.
How are Separation Agreements Different From Early Termination Provisions in an Employment Contract?
In an at-will employment relationship, an employer who terminates an employee’s position may ask the employee to sign a separation agreement. The agreement promises the employee compensation, usually an amount of money equal to several months’ salary, plus continued health insurance coverage for several months or even longer. Another provision of the agreement is that the employee promises not to sue the employer for wrongful termination of employment. Most employees who are employed at will eagerly sign separation agreements when the employer offers them because they believe that the only alternative is to go away empty-handed.
Employment contracts usually have early termination provisions. They indicate what the employee owes the employer if he or she quits before the contract expires. They also indicate what the employer owes the employee if it terminates the employment relationship before the end of the contract period. The early termination provisions often amount to something similar to a separation agreement; in other words, the employer compensates the employee with money and a continuation of insurance benefits.
Alternatives to Signing the Separation Agreement
Most situations where employers offer a separation agreement are situations where the employer must reduce its workforce because of financial constraints. In other words, they are layoffs and not the result of misconduct by the employees who are losing their jobs. The separation agreement is a way to end the employment relationship on good terms and to protect the employer from liability for wrongful termination of employment.
If you think that your employer is wrongfully terminating the employment relationship, you might be right; the mere existence of a separation agreement does not guarantee that it was fair or inevitable for your employer to fire you. For example, the employer might say that it is terminating employees because of a restructuring of your department, but if you are the only one losing your job as a result of this restructuring, you are right to wonder why. Likewise, you are right to suspect that discrimination is at play if all of the employees losing their jobs share the same protected characteristic, even if the employer offered them separation agreements with generous severance packages.
Remember that once you sign a separation agreement, you lose the right to sue your employer for wrongful termination of employment. You also lose the right to negotiate for a better severance package if you have already signed. If you suspect that your employer is firing you for a discriminatory or retaliatory reason and is offering the separation agreement just to prevent you from suing, you should consult an employment lawyer, who might even advise you to contact the Equal Employment Opportunity Commission (EEOC).
Even if you do not think that the separation agreement is a cover for discrimination or retaliation, you should consider it as carefully as you would any legally binding agreement. You should read the contract thoroughly when you are not at work; the employer should allow you at least a few business days to sign it. Beware if your employer demands that you sign the agreement immediately or gives you a short turnaround time for signing. Ideally, you should review the separation agreement with an employment lawyer. Your lawyer might be able to negotiate better severance pay.
Contact HKM Employment Attorneys, LLP, About Separation Agreements
The Huntsville employment lawyers at HKM Employment Attorneys, LLP, can give you advice about separation agreements, including whether to accept the agreement and whether to negotiate for better terms. Contact the employment lawyers at HKM Employment Attorneys, LLP, in Huntsville, Alabama, to set up a consultation.
