Representing Employees and Employers During Severance Agreement Negotiations

From employees and high-level executives to major corporations, we provide the exceptional legal advice and representation clients seek in employment issues. For help with a severance agreement, call 248-633-8916 for a confidential consultation with our seasoned employment law attorneys.

Severance Agreements for Employers

Employers often ask us: What is my exposure?

For employers, a severance action can be a question of “pay now or pay later.” Often, companies mistakenly proceed with termination of an employee and pay severance without thinking about the possible long-term implications – until they end up facing a lawsuit. A brief consultation with a knowledgeable employment attorney, one who can help complete terminations correctly, while using proper severance agreements, can help limit your legal exposure. Attorney Raymond J. Sterling offers clients the employment law experience necessary to properly review severance packages to avoid potential litigation.

Understanding Michigan Law Regarding Severance Agreements

Michigan law has an important role in shaping how noncompete agreements function within Detroit severance agreements for employers. While employers are permitted to include noncompete terms in their employment contracts and employment agreements, these restrictions must be reasonable to be enforceable.

Michigan courts examine whether:

• The noncompete terms protect a legitimate business interest
• The time and geographic scope are fair
• They restrict the employee more than necessary

When a severance package includes severance pay, employers can use noncompete agreements to protect confidential information, client relationships and business stability.

Employers must understand that overly broad noncompete clauses can be challenged in court. If a noncompete agreement prevents a former employee from working anywhere in the industry without justification, it may be considered a breach of the employment contract by the employer.

Michigan courts have the authority to modify or completely invalidate unfair restrictions. Because of this, employers benefit most when noncompetes are written narrowly, clearly and tied directly to identifiable business interests under Michigan law. To help ensure severance agreements remain strong and enforceable, employers should consider implementing specific strategies.

Below are key steps employers can take to keep their severance agreements airtight:

• Make sure the noncompete is tied to a legitimate business reason, such as protecting proprietary information or client relationships.
• Keep the duration of the noncompete reasonable, six months to two years, depending on the industry and role.
• Limit the geographic scope to areas where the business has active operations or customers.
• Offer fair severance pay and clearly associate it with the employee’s agreement to the noncompete restrictions.
• Put all terms in writing and review them carefully with the employee before signing.

These steps help reduce disputes and increase the likelihood that a court will uphold the agreement. A well-structured severance arrangement not only protects the business but also shows professionalism in the separation process.

Because courts regularly review the fairness and enforceability of noncompete provisions, employers should consider consulting employment lawyers who understand Detroit severance agreements for employers and the specific requirements of Michigan law.

Legal guidance helps ensure the agreement supports the company’s interests without exposing it to litigation risks. A properly drafted severance and noncompete package can protect confidential information and business relationships while minimizing legal challenges.

Contact Our Attorneys For Help With Severance Package Negotiation

From our Michigan offices, we handle severance matters for employers and employees nationwide. Contact us online or call 248-633-8916 to schedule a confidential consultation.