5 Questions to Ask Yourself Before Signing a Severance Agreement

Losing your job can be a stressful and difficult experience. You’ll undoubtedly be wondering how you will pay your bills, where you will find a job, and much more. When a company terminates someone’s employment, it sometimes offers a severance agreement that includes a set amount of money to the employee in exchange for the employee’s agreement to not exercise rights which they might otherwise have. These things could include not filing lawsuits against the company, not working for a competitor for a set amount of time, and more.
While these severance packages are sometimes a great option for the employee, this is always the case. Before you sign anything, make sure you ask yourself the following questions. If anything seems to be at all out of the ordinary, make sure you contact Carla D. Aikens, P.C to go over all of your options.

  1. Do My Immediate Financial Needs Outweigh the Potential Compensation from a Wrongful Termination Suit?

If you believe you were wrongfully terminated, or that you experienced any type of harassment or other illegal treatment, you have the potential to file a lawsuit against your former employer. If you sign the severance agreement, however, you have likely given up the right to sue. If you really need the quick payday from the severance agreement, it may be worth giving up the potential lawsuit. If you can afford to wait, however, the lawsuit may have much greater financial potential. Talking to an attorney is the best way to determine what the right course of action may be.

  1. Are They Simply Trying to Keep Me from Suing?

One of the biggest questions you need to ask is what is the motivation of the company for offering this severance package? Most severance packages include a section that limits your ability to file a lawsuit against the company for anything that may have taken place during the time of your employment or after you were terminated. This could include things like wrongful termination, harassment of almost any type, disputed overtime, and much more. If it seems like the company is simply offering this package to try to eliminate a potential lawsuit, it might not be a good idea to sign it.

  1. Does This Agreement Impact Future Employment Opportunities?

Some severance agreements will include a non-compete agreement, which could prevent you from working for a competitor in the same industry for a set amount of time. Depending on where you are working, and which industry, this could be a significant problem. In some situations, it may be best to decline to sign the severance agreement if it would help you to obtain another job more quickly.

  1. Are the Benefits of Any Value? Are they Negotiable?

In addition to a financial payout, most severance agreements also offer a variety of other benefits. These benefits include access to health care for a set amount of time, job training services, and more. These can be great benefits if you need them, but if you are already getting insurance from a spouse, for example, they may be worthless. You may be able to negotiate the removal of these items, and have them be replaced with a portion of the cost that the company would have incurred paying for them, but there is no way to know without communicating in some manner with the company.

  1. Do I Need an Attorney?

While this question is not specifically about the severance agreement, it is still very important. If you have any doubt about the situation, it is a good idea to show the proposed agreement to an attorney and discuss all of your options. Even if you decide that signing is the best course of action, at least you’ll know that you fully evaluated all of the benefits and risks beforehand.  
If you have been terminated from your job and given a severance agreement, contact the law firm of Carla D. Aikens, P.C. right away. We can schedule a consultation with you to go over your situation and help determine the best course of action to achieve a favorable resolution in your case.

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