A severance agreement is a legal contract regarding an employee's departure from a company. It may be called a separation agreement, termination agreement or similar. Typically, a severance agreement will include details such as the effective date of the break, the compensation and benefits the employee will receive upon leaving the company, and any restrictions on the employee's future employment or conduct.
An employer will offer a severance agreement to employees that were terminated, laid off, or who left the company voluntarily. Severance agreements often include a release of claims, which means that the employee agrees not to sue the company for any claims related to their employment or separation. In exchange for this release, the employer typically offers the employee a package of compensation and benefits.
Some of the critical elements of a severance agreement may include:
There are state and federal rules that must be upheld by the agreement. It is important to consult with an employment attorney that can guide you and explain the severance agreement so you can make an informed decision about whether you want to sign it and release your claims. Also, if you are filing for unemployment benefits, it is important to know how a severance agreement may affect those benefits. These agreements can affect your future positions and hireability, so it is vital to know what you may be giving up if you choose to accept a severance agreement.
It is necessary for employees to review these agreements carefully and consult with legal representation, as they may give up fundamental rights in exchange for the severance package.
At Cohoon Legal, we assist clients with severance agreement negotiation, wage claims, wrongful termination, discrimination claims, TWC/EEOC filing, and settlements. Set up an employment consultation today to determine your options when faced with an employment issue.
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Attorney Amber K. Cohoon worked for over thirteen years for small business owners. She managed the finances, administration, and all areas of the business for these owners. She opened COHOON LEGAL in 2017 to bring legal services to the majority of business owners that need affordable and effective legal services.
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