When a professional- or executive-level employee is going to get laid off at work, the employee will often receive a severance package from his or her employer. Perhaps, for example, the employee will receive a year’s worth of pay and a year of insurance benefits in exchange for the untimely loss of his or her job. Such severance packages can involve a lot of money, and they can be very helpful for an employee’s financial security, so it’s wise to take care when negotiating such an agreement with an employer.
Here are several things employees should consider when negotiating a severance package:
Ensure you will receive enough compensation
Employees should ensure that the severance package includes enough additional compensation to keep them afloat in the days and months ahead.
Discuss the arrangements with your attorney
Review the severance package completely, and preferably with a lawyer, before signing the “release of claims” that makes the agreement binding.
Obtain a “release of rights”
In addition to signing a release of claims against the employer, employees may want to have the employer sign a “release of rights.” This offers protection to the employee from claims of wrongful behavior, harassment and other actions.
Check for noncompetition clauses
Employees should review any kinds of noncompetition agreements included in the severance package contracts to ensure that the terms are fair. An unfair noncompetition agreement could serve to render the individual unemployable for a certain period of time.
Your severance package is an important document that could help you stay financially afloat in the months ahead. If you’re negotiating a severance package relating to your job layoff, discuss your situation with an attorney who can educate you about your legal rights and options.