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Why Your Severance Agreement May Be Invalid, And What You Should Do About It

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When an employee is terminated from a company, he or she might be asked to sign a severance agreement, which is a legally binding contract that offers considerations like monetary incentives and additional benefits to the employee in exchange for a waiver of the right to sue the company in the future.

Employers may use contracts like these as a risk management tool to avoid litigation with former employees who suspect wrongful termination. By offering compensation as an incentive, employers might be able to convince employees to forfeit their right to sue.

Although a signed severance agreement prevents a terminated employee from suing his or her former employer, there are a variety of factors that render such a contract invalid and allow it to be challenged.

Below, you will learn circumstances that can invalidate a severance contract. If any of these scenarios apply to you, contact a trusted team of severance agreement lawyers in Burlington County to fight for you.

The most common causes of an invalid severance agreement are:

  1. 1. Pressure to SignTerminated employees may feel they have no choice but to sign the deal they are being offered, even if they believe they are being unjustly fired. Employers benefit significantly from a signed severance agreement and might attempt to pressure the employee into signing. If your signature was obtained under duress, fraud, or improper influence from an employer, it might no longer be considered a voluntary signature, and thus is open to being challenged.
  2. 2. Insufficient Time to ConsiderThe waiver of certain claims, such as age discrimination claims, requires an employee to receive a minimum of 21 days to read, understand, and review the terms of the severance contract. This includes time to seek legal counsel, which must be explicitly encouraged within the contract. If an employer discourages an employee from consulting an attorney in any way, the contract may be invalidated. For certain claims, a period of seven days must also be granted to the employee to revoke the signature after signing.
  3. 3. Unclear or Complicated LanguageThe Equal Employment Opportunity Commission (EEOC) has issued guidance which states that severance contracts must be written in clear enough language for the average employee to understand. This means complicated, and jargon-filled agreements are illegitimate, and any language that intends to mislead or misinform employees is unfair.
  4. 4. Unfair TermsThe terms of the contract must be fair and abide by specific requirements under the law. The agreed to terms of the contract must explicitly spell out the rights the employee is agreeing to waive. In addition, certain claims are not waivable under the law,

One of these sounds like my situation. What do I do now?

These are some of the factors that severance agreements must abide by to be considered valid and enforceable. Signing one of these contracts forfeits your right to sue the employer at a later date, but if you suspect the agreement is invalid for any of the reasons stated above, it is in your best interest to contact a qualified severance agreement attorney in Burlington County today.

A trusted legal team can help you understand your severance agreement, in addition to help negotiate more favorable terms, such as greater compensation. Contact the Law Firm of Jacobson & Rooks, LLC at 800-406-8013 to help evaluate and understand your severance agreement.

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