20 May What You Need to Know About California Severance Agreements

Navigating Severance Packages: Rights and Considerations

When a company and an employee part ways, the employee often walks away with a severance package, usually a figure based on the number of years the employee spent working at the company, along with certain benefits such as access to a health insurance package.

Employer rights

The severance package acts as a release from all claims. A severance package does not prevent an employee from being eligible for unemployment insurance benefits unless misconduct is the reason behind the separation between the employer and employee. An employee may also become ineligible for unemployment if misconduct is the reason for departure.

In this case, a severance package would be the only funds an employer would pay, and again, if misconduct is the reason for departure, a severance package may also be off the table along with unemployment benefits. Severance agreements also often include preventing an employee from revealing trade secrets, but they can’t include non-compete agreements, which would prevent an employee from getting another job in the same industry. 

Employee rights

If an employee and an employer are parting ways because of sexual harassment or any other form of harassment, discrimination claims, wrongful termination or any other reason that the employee feels is detrimental to his or her career, he or she has the right to consult with an attorney before signing and accepting the severance package, and should, because in many of the instances mentioned, there could be grounds for a lawsuit.

A Business Attorney Can Protect Your Rights

An experienced attorney who specializes in severance packages such as Brandon Fernald of Fernald & Zaffos can help you draft a severance agreement that will protect both parties if the employment relationship comes to an end. If you are drafting a severance package agreement or are debating whether it is in your best interest to sign a severance agreement based on certain workplace experiences, call our offices today for guidance.