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Can a former employer deny a contractual severance package?

On Behalf of | Jan 24, 2022 | Employment Contracts |

Severance packages are a benefit of employment, not an entitlement. Many educated professionals like executives and managers negotiate an employment contract when they accept a new position somewhere. Asking for severance pay is often part of those negotiations. 

Getting an employer to agree to some kind of severance pay can be important for those in highly-skilled positions who will likely require substantial transition time to find new work. Despite having negotiated an agreement with your employer before you started, they may try to withhold your severance package from you at the end of your employment.

Does the at-will employment statute in Michigan prevent you from taking action about denied severance pay? 

State law does not supersede your contract

The at-will employment laws in Michigan do affect your rights in the workplace. You can quit your job at any point without facing consequences, and your employer can terminate you for any legal reason without risking legal backlash. 

Although those laws do determine your rights at the end of your employment, they do not negate the commitment that you and your employer made to one another in your contract. If they agreed to provide you with six months salary or access to health insurance at the end of your employment, you should receive that promised compensation at the time that you leave your job. 

A careful review of your employment contract can help you prepare to negotiate with your employer or possibly take legal action against them for any violations. Understanding your rights, including your right to contractually agreed-upon severance pay, will help you during an unexpected work transition.


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