Employment Law: Key Steps to Navigating Severance Agreements

Employment severance agreements play a crucial role in defining the terms and conditions of an employee’s departure from a company. Negotiating the right provisions can have a significant impact on the financial and legal aspects of the separation. Here are a few tips to consider when negotiating an employment severance agreement with insights from Jacqueline Weiss, Esq., a business lawyer at the Manhattan Law Office of Pardalis and Nohavicka.

Severance Pay and Benefits:

Ensure that the agreement specifies the amount of severance pay, and any additional benefits to be provided upon termination. Negotiate for a fair and reasonable package that reflects the contributions and years of service.

Release of Claims:  

Include a provision stating that the parties will release each other from any legal claims arising from the employment. Seek legal advice to ensure the language does not compromise any rights.

Non-Disclosure and Confidentiality:

Address the protection of sensitive information and trade secrets. Negotiate provisions that restrict the disclosure of confidential information, while still allowing you to discuss your experiences, and provide references.

Non-Competition and Non-Solicitation:

Examine any restrictions on the ability to work for a competitor or solicit the company clients or employees. Seek to limit the duration, geographic, scope, and industry applicability of these clauses to something that will be fair and enforceable.  *Over restrictive, noncompete and nonsolicitation agreement will not be upheld, generally.

Intellectual Property Rights:

Clarify ownership of intellectual property created during the employment. Negotiate for fair terms to protect the company ownership interest in any intellectual property while respecting each parties interests.

Non-Disparagement:

Consider, including a non-disparagement provision to prevent negative statements about each other. Ensure the provision is mutual, and does not restrict your ability to provide truthful information when requested.

Return of Company Property:

Specify the obligations regarding the return of company property, including devices, documents, and proprietary information. Ensure the agreement details the condition in which the property must be returned.

Governing Law and Jurisdiction:

Specify the governing law and jurisdiction for any disputes. In today’s employment climate employees may be working remotely or from other jurisdictions that are not beneficial to each party. 

Severability and Entire Agreement:

Include a severability provision that states if any provision is found unenforceable. The rest of the agreement remains intact. Additionally, confirm that the agreement constitutes the entire agreement and supersedes any prior agreements or discussions, and that the agreement can only be altered in writing and signed by both parties.