In many instances, a company writes a severance package into a new employee’s contract when he or she is hired. A severance package outlines the employee’s benefits following his or her termination, any pay he or she is entitled to receive, and stipulations about his or her future employment. This last portion of a standard severance package can severely limit an individual’s professional opportunities by requiring him or her to agree to restrictions on where and for which companies he or she may work following his or her termination in exchange for the payment and benefits included in his or her severance package. Often, there are also clauses included in the severance package that restrict the individual’s right to file a discrimination or wrongful termination lawsuit against his or her former employer. RCW 49.17 states the regulations for hiring contract employees in Washington.
Always Review your Severance Agreement with an Attorney
Severance agreements can be long, complicated, and full of legal jargon. As a newly-hired employee, losing your job is likely to be the last thing on your mind and your eagerness to begin your new position might keep you from reading your severance agreement closely and truly understanding what your company is asking of you. This is why it’s so important for you to contact an attorney and have him or her review your severance agreement with you before you sign it. An experienced employment attorney can catch any unreasonable or illegal stipulations included in your proposed severance agreement and help you draft a more favorable version. Think of this as an investment in your future career – you’ll protect yourself from unreasonable restrictions later on while retaining your right to stand up to any discriminatory behavior you might experience.
Parts of a Severance Agreement
A severance agreement is traditionally made up of the following parts. Some employers omit certain provisions and others may choose to add their own, depending on the needs of the company.
- Termination Provision. This portion states the end date of the individual’s position with the company.
- Severance Payment. This is the payment that the employee is entitled to receive following his or her termination. It may include unused sick days or vacation time as well as a final paycheck, which is sometimes calculated based on the length of the individual’s employment.
- Full Release. This provision requires the employee to waive his or her right to file any type of complaint or lawsuit against the company, such as one for discrimination or for unpaid wages. It might also require the employee to state that he or she has no knowledge of illegal or unethical acts committed by the company.
- COBRA Information. This is information about the employee’s right to retain his or her group health benefits for a set amount of time following his or her termination.
- Confidentiality Agreement. Under this agreement, the employee agrees to keep all sensitive company information, such as trade secrets, recipes, and organizational strategies used by the company, secret.
- Non-Competition Agreement. This provision states that the employee may not work with a competitor for a specified length of time or within a certain radius.
- Non-Solicitation Agreement. This portion of a severance package requires the employee to agree not to contact the company’s clients for business purposes for a specified length of time.
- Non-Disparagement Agreement. This agreement prohibits the employee from making any type of negative public comment about the company.
Severance Review Attorneys Can Help
If you’ve recently taken a new job and you’ve been offered a severance package, contact HKM Employment Attorneys LLP at 206-838-2504 to schedule an appointment for one of our firm’s attorneys to look over the agreement before you sign it. Having an attorney review your severance package can be the difference between a stifled or a prosperous career.