Especially among executive and management positions, it has become common for employers in the Orlando area to offer employees a severance agreement if they are choosing to let an employee go.
For both employers and employees alike, there are many benefits to severance agreements. For employees, it can give them important protections of their reputation and thereby preserve future job opportunities.
A severance agreement will usually also provide compensation to the employee in the form of money or ongoing benefits.
For an employer, the agreement will involve an employee’s waiving important legal options and claims, thus saving the employer potential time and money on lawsuits.
An agreement can also prevent the employee from working for or sharing confidential information with a competitor.
Things can go wrong with severance agreements
However, there are many things that can go wrong with signing a severance agreement. This is why many employees choose to have a legal review of a proposed agreement before they sign it, even if that means a same-day trip to a law office.
For example, if the agreement includes a non-compete or confidentiality clause, the employee should consider if those obligations will make it unreasonably difficult to find another job in his or her field.
It is also important for employees to remember that most agreements will require the employee to agree not to sue the employer for discrimination, wrongful termination or for other common grounds after an employee gets fired.
If an employee feels he or she may have a claim, he or she should think carefully before agreeing not to pursue. Many times, the compensation available under the severance agreement is not nearly as much as what the employee could demand in a court case.
As a caveat, an employer may not prevent an employee from reporting discrimination to an agency like the federal Equal Employment Opportunity Commission or participating in an administrative investigation, even after signing a severance agreement and receiving severance pay.
On that note, Florida employers are also well-served to review their proposed agreements for enforceability or other legal issues.