Getting a lawyer to read over your severance agreement carefully is the smart thing to do. They may discover hidden clauses or other technical details that you would miss if you didn’t have someone else read it. Sometimes companies will attempt to use the terms of a severance package to control what you do after you’re dismissed, which can be a hassle at the very least. To ensure that your severance package has terms that you can live with, here are some things that you should watch out for.
Time Limits on the Severance Package
If you’re over the age of 40 you’ll probably see some language referring to a time limit in your severance agreement. Although you may see the same language if you’re younger than 40 as well. The idea is that in order to waive age discrimination claims, older workers (anyone over the age of 40), must be given 21 days to consider an agreement where they’re being asked to release an age discrimination claim. After that, an older worker must be given an additional 7 days to revoke the agreement after they’ve signed it.
You should be aware that you’re unlikely to be paid until that period expires. The ADEA (the statute relating to age discrimination) only applies to people over the age of 40, so it’s not necessary for this clause to be included in severance package agreements for younger workers. However, that being the case, most agreements will guarantee you the opportunity to consult legal counsel. If you need help understanding the severance package, regardless of your age, you should probably talk to a lawyer.
How Will a Non-Compete Agreement Affect Me?
A non-compete agreement is based on an employer’s belief, right or wrong, that you have obtained valuable insights into the company. Because of that they don’t want you to use any information to compete against them or make a profit based on knowledge that you accrued while working for them. While this is a legitimate concern, you need to be careful. Non-compete agreements are responsible for a majority of severance package agreement issues.
For A Free Estate Information Guide
The first thing you should be aware of is that non-compete agreements are a restriction against trade, which is a big no-no in law. So if a company is going to restrain your ability “to trade” through a non-compete agreement, it has to be done very carefully. There are multiple requirements that need to be met for a non-compete to be valid. If your company asks you to sign a severance agreement with a non-compete clause in it, you should first take it to a lawyer to have the agreement looked over.
You may also want to negotiate the length, geographic territory, and other aspects of the agreement to ensure that you’re not left without the ability to work for a year or two. Finally, if you’re going to sign a severance agreement with a non-compete clause, ensure that you’re compensated for it fairly. Since a non-compete clause may restrict your ability to earn a regular income for a certain amount of time, you’ll want to ensure that you’re receiving something in return.
Consulting Agreements
The irony may be thick, but in some situations your previous employer may hire you as a consultant, even after they’ve dismissed you. You’re looking for work and they need someone to help them perform some of your former duties until they can find a replacement. If this happens you might find yourself consulting for your former company and receiving compensation for it. If there is some possibility of this arrangement, you’ll want to negotiate the details at the same time as you’re negotiating your severance pay package. By negotiating both at the same time you may be able to come to a more favorable agreement which ensures that you’ll be making a livable salary until you find a new job.
Non-Solicit Agreement
Your employer may offer you a severance package which contains a non-solicit agreement. If that’s the case, you’ll be unable to hire anyone from the company if you decide to start your own business. Alternatively, it may also dictate that if you go to work for a new company that’s in the same industry as your old company, you won’t be able to advise your former coworkers to quit that company and join you at the place that you work now.
Most non-solicit agreements last a year or two, after which they expire. If you’re planning on starting your own business and you are thinking about hiring people who you worked with before you were dismissed, you should be very careful about doing so if you signed a non-solicit agreement. A lawyer can help you to figure out exactly what a non-solicit agreement does and does not allow you to do.
Hiring a Lawyer to Help You Negotiate Your Agreement
While some severance package agreements are straightforward and simple, other agreements can be detailed and difficult to understand. This is especially true if your agreement contains a non-compete clause or other fine print which may be difficult to understand. If that’s the case you may want to hire a lawyer to help you read through the agreement and ensure that you’re not getting shortchanged by your employer. Even though the lawyer may be expensive, it’s worth it. If you don’t hire a lawyer and you accidentally breach your severance package contract six months later, you could find yourself in a lot of trouble and few ways to get around the ensuing legal battle.
It’s better to spend the money upfront and get expert legal advice to ensure that you don’t agree to a severance agreement which may restrict your ability to work in the future. Also, if you do agree to a non-compete clause laid out in your severance package, a lawyer can help you to maximize the severance pay that you receive, since you’re agreeing to your employer’s terms.
Download Free PDF Guide On The Probate Process
