Provisions to look out for before signing severance agreements

Provisions to look out for before signing severance agreements

On Behalf of | Aug 20, 2023 | Employment Law - Employee, Severance Agreements

The provisions of severance agreements are usually drafted to protect employers. While some contract terms might not violate employee rights, other provisions may place an employee in a disadvantaged position. Understandably, not all employees are adept at reading and understanding agreements. Hence, they fall into a trap and sign the contract without knowing they just gave up their rights.

Fortunately, employees now have available resources to prevent employers from taking advantage of them. To protect their rights, employees must look out for the following severance agreement clauses.

Payment terms with wiggle room to stop payments

Some employers may stipulate to pay the severance payments in installments. Generally, the law does not prohibit employers from doing this. However, some employers may attempt to stop payments when the employee finds a new job or find other reasons to reduce the amount later on. As much as possible, employees should fight for a lump-sum payment of their severance pay to avoid these situations.

Noncompete provisions that are too restricting

If there is a clause in the contract that prohibits the employee from working for a competitor or establishing a similar business, the employee must check the scope of the limitation. Florida allows noncomplete clauses as long as they are reasonable in time, area and line of business. If the provision is too general and has a wide scope, the court will render it unenforceable because it unreasonably limits the employee’s employment and business opportunities.

Other inaccurate or unusual clauses that might adversely affect the employee

Some information in the contract that may seem simple can actually cause complications later on. For instance, the agreement should include the exact termination date because it will determine how much the employee will receive. If any inaccuracy goes unnoticed, it can negatively affect the employee and their severance pay.

Losing a job is already a difficult situation for an employee. But having their rights curtailed is a different story. It is essential for terminated employees to carefully review the agreements to ensure that they protect their rights. If they have to, they can work with an employment law expert to ensure they cover all bases of the contract.