5 Mistakes Employees Make When Offered Severance Agreements

There is nothing that completely takes away the sting of losing your job, but a severance package can offer a departing employee a temporary insurance policy, of sorts, to help them make it to the next chapter in his or her life. Many people who are being terminated from their positions at work likely do not have much experience with severance packages; as a result, they might commit an error that leaves money or benefits on the negotiating table. This blog will go through mistakes employees occasionally make during the severance process. 

1. Not looking at the previously-signed employment agreement. Many times, employers have you sign an employment agreement when you begin work, or at some time during the course of your employment.  This document can affect your rights, including things such as the time you have to file a lawsuit and whether you have to go to arbitration. You must understand what may be in this agreement before you can properly evaluate a severance agreement.

2. Not taking the time to read through the agreement. Learning of your termination promises to be a chaotic time in your life. Your mind immediately goes to applying for open positions to keep the lights on at home. During this flurry of activity, you might not put a premium on carefully reading and analyzing the language in the severance package you’re being offered. Whether or not you end up taking the offered package, you should, at the bare minimum, understand what you are giving up and receiving with the severance package.

3. Assuming there is no choice but to sign the agreement. Both Michigan and Illinois, as with most other states, are at-will employment states. So, unless you are in a union with a collective bargaining agreement, you can generally be let go for any reason, or no reason at all. This doesn’t mean, however, that you have to sign what is put in front of you. You do have a choice when it comes to signing severance agreements. Depending on what you think is attainable, you might be able to negotiate more favorable terms. 

4. Dismissing the idea of legal action against their employer. The key reason why employers offer severance packages to departing employees is due to the fact that they want the employee to agree not to sue them. In exchange for pay and other benefits, the employee will commit to refraining from certain behavior in many instances; frequently, this behavior includes filing a lawsuit for sexual harassment, wrongful termination, or discrimination. 

Offering a severance package works on several levels for employers. First, the employee might be tempted to accept the package (a sure thing) instead of going to court and attempting to win a lawsuit (which is, of course, not guaranteed). Also, the severance package might be successful in gaining enough “good will” from the employer such that the employee ultimately decides not to go forward with litigation. If you feel you have a good lawsuit against your current or former employer, don’t let a severance package deter you from seeking justice.

5. Not hiring an attorney to look over the agreement. Accepting a severance package when you feel that you experienced some sort of unlawful action during the course of your employment is not weakness. Ultimately, you must do what’s best for you and your family.

The only way to be completely sure you’re taking the best course of action is to discuss your situation and options with an experienced employment law attorney like Carla D. Aikens. Our firm is incredibly adept at negotiating agreements on behalf of employees and getting remedies for employees who have been wronged. Our firm is offering free consultations right now; please give us a call today at 844-835-2993 so we can start working for you.