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Defining the Parameters of a Separation or Severance Agreement

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Regardless of which industry you work in these days, whether it is blue collar or white collar, there’s always a possibility for layoffs. Perhaps your employer has lost a bulk of its revenue or has been purchased by a larger entity. Whatever the circumstance, it behooves you to be familiarized with the concept of a separation or severance agreement.

By Definition

Legally speaking, a separation or severance agreement is an enforceable contract. By signing the agreement, an employee typically agrees to receive certain compensations/benefits package in exchange for the waiver of certain rights. Most crucially, employees waive their right to sue their employers, for causes of action generically described as “wrongful termination.” This could include claims pertaining to disability discrimination, racial discrimination, sexual harassment, and discrimination based on other protected traits. The employer does not have an obligation to offer a severance agreement, but may do so as a mechanism to avoid possible employment-related claims which could be brought by the employee.

In drafting a severance agreement, employers word their contracts in their favor, so as to minimize their liability and risk. Separation agreements may also contain restrictive clauses, e.g., non-competition and non-solicitation covenants, which infringe on a worker’s freedom. Most contracts contain confidentiality clauses, which restrain an employee from openly discussing or disclosing the existence of the agreement, or the events that culminated in the drafting of the agreement.

Because of the employer-friendly language contained in severance agreements, it’s essential to consult with a local attorney serving employees in areas like Camden County. Versed in workplace sexual harassment, as well as severance agreements, like the attorneys at the Law Firm of Jacobson & Rooks, LLC. They will assist you in reviewing and negotiating for a fair contract.