In an average week, I often review as many as six (6) severance or similar agreements. The primary question that is posed during such consultations is: should I sign the agreement? That is not a question that I can answer because it is in not a legal question. It is a practical question.After explaining that the question is a non-legal one, I pose one of my own: is what you are getting more valuable than what you are giving up? If so, it would seem that “practical” thing to do would be to sign the agreement. However, the devil is in the details with these agreements and it may not easy to really figure out what you are giving up. Thus, it is important to have your severance agreement (or any employment agreement) reviewed by an experienced employment attorney.
With all that out of the way, let’s look at the common terms found in many severance agreements.
- A release. The employer wants the employee to “release” all claims the employee may have against the employer, its employees, agents and owners. If the release is valid, the employee will not be able to sue the employer for any matter that is covered by the release.
- A promise of no claims. This provides that the employee acknowledges that she has no claims against the employer. For example, the agreement may have an acknowledgement that the employee has been paid all wages due.
- A promise of agreement confidentiality. The employer wants the agreement and any payment to be confidential, i.e. the employee must keep quiet about the terms of the agreement.
- A non-disparagement provision. This provision is an agreement that the employee will not make negative comments about the employer.
- A no rehire provision. This prohibits the employee from being rehired, or often even applying to be rehired, by the employer.
- A non-compete provision. This will prohibit the employee from working for certain other employers within a specific time period or geographic area (including possibly an industry)
- A non-solicitation provision. This provides that an employee will not solicit other employees to leave the employer.
- A information confidentiality provision. This provision covers certain information that the employee may have been privy to while employed. It prohibits the employee from disclosing or otherwise using the confidential information.
In 20 years handling employment law, I have reviewed through hundreds of severance and release agreements. Some are as short as one or two pages and some are as long as 40 plus. However, in all cases, these were legal documents that needed qualified legal review. I strongly recommend that anyone presented with such an agreement or any employment agreement, have it reviewed by an experienced employment attorney.
If you need legal review of your severance agreement in North Carolina contact our office in Concord or Greensboro. In Tennessee, contact our Knoxville office.