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3 options if an employer won’t honor your severance agreement

On Behalf of | Oct 13, 2022 | Employment Disputes |

Some companies automatically offer severance packages to certain employees. Other times, employees can specifically negotiate severance arrangements when accepting a new position with an employer, or when leaving their employment.

Whether the severance package is a standard benefit offered by the company where you work or a unique term of your own employment contract, you should make sure you understand the terms and what you’re really entitled to.

Provided that you do not violate other aspects of your contract and thereby nullify your claim to the severance package, you should be able to depend on receiving pay and benefits for a fixed amount of time after the unexpected loss of your job. What steps should workers take if the company they work for lays them off or fires them without upholding their severance agreement?

Review your contract

Your employment contract can validate your belief that you have a right to severance in your current situation. If the documents or records support your belief, you then need to advise your employer of the contract terms.

Advise the right parties of the severance issue

Perhaps your direct supervisor has failed to turn in some paperwork that the corporate offices need to issue severance pay or approve the exception to continue your health insurance coverage now that you are no longer employed with the company. Maybe there was a mistake with internal records in the company no longer has information about the agreement from your onboarding days.

You may need to provide information to the company about your severance agreement and remind them of their obligation to compensate you now that they have terminated your position with the company. Workers who have already transitioned out of a job and those who left under unfavorable circumstances may find that they benefit from having a lawyer present this information to the company.

Know when you need to take legal action

If the company makes promises but fails to follow through or fails to respond when you inquire about the status of fulfilling your severance agreement, you may have no choice but to initiate a legal claim against the company. Sometimes, taking a former employer to court is the only way to get compensation after the loss of a job.


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