One of the most important things a Connecticut Employment lawyer can do for you is review or negotiate a severance agreement. There is no standard form agreement for severance like for a home purchase. Each and every term is critical.
An employee is typically not entitled to severance payment simply for being terminated. Originally, a severance package was a gesture of goodwill. In some cases, it still is. But, typically, it comes with strings attached.
Five common clauses in severance agreements are:
1) Release: You, the employee, give up your right to sue the employer for anything unlawful or in violation of contract that occurred during your employment. Be aware that you may have had a claim you did not realize and that there are some claims that cannot be given up, even if you sign the agreement.
2) Nondisparagement: You are agreeing not to say anything bad about your former employer-EVEN IF IT IS TRUE! A lawyer can help narrow the extent and help ensure that your former employer also agrees not to provide you with a bad reference.
3) Nondisclosure: An employer may use the severance agreement to extract a promise from you not to reveal certain proprietary information. This may extend beyond the normal prohibitions against revealing trade secrets.
4) Noncompete: You may have signed a noncompete agreement as well, but it is important to work with a lawyer to understand that you may be precluded from working in certain occupations, for certain employers, and/or in certain locations for a reasonable period of time. You may also be barred from soliciting former clients, coworkers and vendors.
5) Continuation of Benefits: Your termination and severance will affect your health, dental, disability, and life insurance benefits. Many severance agreements affect them.
There may be other terms such as return of company property, presence on company premises, choice of law, severability, and dispute resolution/arbitration clauses. In addition, you should discuss with an attorney how the severance may affect your ability to collect unemployment benefits or workers’ compensation benefits, as well as any other wage claims you might have.
Everything can typically be negotiated. A seemingly standard severance agreement can be tailored to you. One exception is if the employer has an “ERISA” severance plan. Like with health insurance and pension plans, the employer may have set up a Severance Plan that is specifically subject to the federal ERISA law. In that case, the employee usually gets a non-negotiable defined benefit based upon the length of employment and salary history. A lawyer can help you ensure that you get the benefit to which you are entitled. Additionally, a lawyer could help increase your severance in exchange for one or more of the common clauses listed above.