Severance Agreements and Releases: A Breakdown
You never walk into your dream executive job thinking about an exit strategy. But there is a distinct possibility that you may be asked to leave your company for any number of reasons. Rather than being blindsided by this, you can agree to a severance package with your employment.
Why would a company agree to a severance arrangement? They can prevent expensive litigation between employers and terminated employees. The agreement itself is just a contract between an employer and employee waiving certain legal rights of the employee in exchange for additional compensation or other benefits provided by the employer. On one hand, for the employee, the positive side of severance benefits may include large one-time payments, continued health benefits, additional salary payments, letters of recommendation or other offers.
On the other hand, severance packages may also include critical non-compete and confidentiality agreements, as well as releases requiring the employee to give up any claims she may have forever. Before signing such an agreement, be knowledgeable of the effects those provisions may have on your future ability to obtain employment.
If you’ve been offered severance in exchange for a release, contact us today.