Severance Package Negotiation Attorneys
Severance Package Lawyers
In many cases, severance packages are negotiable, especially if you are an at-will employee. You can negotiate the terms of your severance package, including the amount of pay and benefits, the release of claims, and any other terms that you believe are important. It is advisable to have a clear understanding of the company’s policy and your legal rights, and to consult with a lawyer if necessary. Additionally, it is important to approach negotiations in a professional and respectful manner, keeping in mind that your relationship with the company and its management may continue after the negotiations are completed.
A severance package is a set of benefits and compensation offered by an employer to an employee upon termination of employment. The purpose of a severance package is to provide financial and other support to an employee during the transition from their current job to a new job or retirement.
Severance packages typically include financial compensation, such as a lump sum payment, continuation of certain benefits, such as health insurance, and outplacement services to help the employee find new employment. The terms of a severance package vary depending on the specific circumstances of the termination, including the employee’s job level, length of service, and the reason for termination.
Severance packages are often offered to employees who are terminated due to layoffs, downsizing, or the closing of a business. However, they may also be offered to employees who resign voluntarily or who are terminated for cause.
In many cases, severance packages are negotiable and can be modified based on the specific needs and circumstances of the employee. It is important for the employee to fully understand the terms of the severance package and to seek legal advice, if necessary, before accepting the offer.
Be aware of the time limit that you have to consider the severance agreement proposal. The length of time that you have to accept or reject a severance agreement varies and may be specified in the agreement itself. It can range from a few days to several weeks or even months. It is important to carefully review the agreement and seek legal counsel if necessary before making a decision. It is also a good idea to make sure you understand the terms and conditions of the agreement, as well as your rights and obligations, before signing it.
Severance Packages and Agreements
Severance packages offered by companies in Georgia, like in other states, can vary widely based on factors such as the size of the company, the number of employees being terminated, the length of time the employees have been with the company, and the specific terms agreed upon between the employer and the employee.
A severance package typically includes a combination of financial and non-financial benefits offered to employees who are either being laid off or terminated from their jobs. The components of a severance package may include:
- Financial compensation / Severance pay: This typically includes a lump sum payment, based on the employee’s salary and years of service. The amount of financial compensation may vary depending on company policies and local laws.
- Continuation of benefits: The employee may be eligible to continue receiving certain benefits, such as health insurance, for a limited period of time after their termination.
- Outplacement services: The company may offer assistance to the employee in finding new employment, such as resume writing and job search services.
- Release of Claims: The employee may be required to sign a release of claims, which waives their right to sue or take legal action against the company for any potential legal issues related to their termination.
- Non-compete agreements: The company may ask the employee to sign a non-compete agreement, which restricts them from competing with the company for a certain period of time after their termination. This can have significant ramifications on future employment and your ability to lawfully obtain a new job.
- Non-disparagement agreements.Non-disparagement clauses and agreements are typically included in employment contracts, severance agreements, and settlement agreements. They are provisions that prohibit an individual from making negative or critical statements about an employer, coworker, or company.A typical non-disparagement clause or agreement might look something like this:”The Employee agrees that he/she will not make any negative or critical statements, either orally or in writing, about the Company, its employees, products, services, or business practices. The Employee further agrees that he/she will not engage in any conduct that is intended to harm the Company’s reputation or business interests.”It is important to note that non-disparagement clauses may be enforceable if they are reasonable and not overbroad. However, they may be unenforceable if they violate an individual’s right to free speech or are found to be illegal or contrary to public policy.
- Non-solicitation agreements. Non-solicitation agreements are commonly included in severance agreements, employment contracts, and settlement agreements. They are provisions that prohibit an individual from soliciting or attempting to solicit the business of the employer’s customers, clients, or employees.A typical non-solicitation clause in a severance agreement might look something like this:”The Employee agrees that during the term of this agreement and for a period of [insert time period] following the termination of the Employee’s employment, the Employee will not directly or indirectly solicit, divert, or take away any of the Company’s customers or clients for the purpose of providing competing services or products. The Employee further agrees not to solicit or recruit any of the Company’s employees for the purpose of competing with the Company.”It is important to note that non-solicitation agreements must be reasonable in scope and duration, and not overly restrictive, in order to be enforceable. Additionally, non-solicitation agreements may not be enforceable if they violate an individual’s right to work or are found to be illegal or contrary to public policy.
- Restrictive covenants. Restrictive covenants are commonly included in severance agreements, employment contracts, and settlement agreements. They are provisions that restrict an individual’s ability to compete with the employer or solicit the employer’s customers, clients, or employees. A typical restrictive covenant clause in a severance agreement might look something like this:”The Employee agrees that during the term of this agreement and for a period of [insert time period] following the termination of the Employee’s employment, the Employee will not engage in any business that competes with the Company or solicit any of the Company’s customers, clients, or employees. The Employee further agrees not to use any confidential information or trade secrets of the Company in connection with any competitive business.”It is important to note that restrictive covenants must be reasonable in scope and duration, and not overly restrictive, in order to be enforceable. Additionally, restrictive covenants may not be enforceable if they violate an individual’s right to work or are found to be illegal or contrary to public policy.
- Retirement plan distributions: If the employee has accumulated benefits in a retirement plan, they may be eligible to receive distributions at the time of their termination.
- Stock options and restricted stock units: Depending on the company’s policies, the employee may be eligible to exercise their stock options or receive restricted stock units as part of their severance package.
- Reference letters: The company may offer to provide reference letters to assist the employee in their job search.
If you’re considering a severance package offer, one of the key things is that you realize what is negotiable and what the possible alternatives are:
- You can ask for more money, but this often depends on seniority and how long you’ve been with the company.
- You can specify how you want the severance paid — such as in one lump sum or in monthly installments.
- You can request to remain a contractor for the company while you look for another job (this option would replace any paid installments or lump sum).
- You can ask that the company make payments to your retirement plan so that it reaches a fully vested amount. Or, you could request that the company move your termination date until you are fully vested.
- You can request that your employer, in the future, be a reliable reference for you and describe your character and work favorably.
- You can ask your employer to cover your health insurance until you secure it at your next job.
- You can request that your employer accelerate the vesting period of your stock options or request to have them continue to vest after you leave.
The components of a severance package can vary depending on the company, the specific circumstances of the termination, and local laws. It is important to thoroughly review and understand the terms of a severance package before accepting it.
It’s important to note that in Georgia, as in other states, employers are not legally required to provide severance packages to terminated employees. However, if a severance package is offered, it may be subject to certain laws and regulations, such as the Employee Retirement Income Security Act (ERISA), the Fair Labor Standards Act (FLSA), and state wage and hour laws.
Severance packages can be offered to employees in a variety of occupations, although they are most commonly offered to employees in white-collar jobs such as managers, executives, and professionals. This is because these types of employees are typically covered by employment contracts or company policies that specify the terms of their severance packages.
When an employer requests that an employee waive certain rights in a severance package, it can create negotiating leverage for the employer. This is because the employee may be facing the loss of their job and may be more likely to agree to the terms of the severance package, even if they include a waiver of certain rights.
By agreeing to the terms of the severance package, including a waiver of certain rights, the employee is typically giving up the ability to take legal action against the employer for issues related to their termination. This can include waiving the right to sue for wrongful termination, discrimination, harassment, or other potential legal claims.
However, the employee may still have some negotiating leverage in this situation. For example, they can negotiate for a higher financial compensation in exchange for waiving their rights, or they can request additional benefits, such as outplacement services or extended health insurance coverage.
It is important for the employee to carefully consider the terms of the severance package and seek legal advice, if necessary, before agreeing to waive any rights. A qualified attorney can help the employee understand the potential consequences of waiving their rights and negotiate for the best possible terms in their severance package.
Employees in industries such as finance, technology, and consulting, which often have a high rate of mergers and acquisitions, may also be offered severance packages. Additionally, unionized workers may have severance benefits outlined in their collective bargaining agreements.
It’s important to note that while certain occupations may be more likely to receive severance packages, the decision to offer a severance package is ultimately up to the employer, and the terms and conditions of any severance package will depend on the specific circumstances and agreement between the employer and the employee.
Severance Package Laws
In most states and federally, there are not laws that specifically govern severance packages. However, there are laws that impact and relate to the terms of severance packages. Severance packages may be governed by a variety of federal, state, and local laws, including:
- The Fair Labor Standards Act (FLSA): The FLSA sets the standards for minimum wage and overtime pay and may apply to severance pay if it is considered wages under the act.
- The Employee Retirement Income Security Act (ERISA): ERISA governs the terms and conditions of employee benefit plans, including severance pay plans.
- Title VII of the Civil Rights Act of 1964: Title VII prohibits employment discrimination on the basis of race, color, religion, sex (sexual harassment), or national origin. This law may apply to severance packages if the employee claims that they were terminated based on one of these prohibited factors. Discrimination based on certain protected characteristics, such as race, color, religion, national origin, sex, age, or disability, is illegal under federal and state anti-discrimination laws, such as Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act (ADEA), and the Americans with Disabilities Act (ADA).If an employer provides severance pay to some employees but not others, and the difference in treatment is based on a protected characteristic, this could be considered discriminatory and illegal. For example, if an employer provides severance pay to male employees but not female employees, this could be considered sex discrimination. If an employee believes they have been the victim of discrimination in a severance package, they may file a complaint with the Equal Employment Opportunity Commission (EEOC) or a similar state agency. It’s important for employers to ensure that their severance policies and practices are in compliance with anti-discrimination laws and that they do not discriminate against employees based on protected characteristics.
- The Americans with Disabilities Act (ADA): The ADA prohibits employment discrimination against individuals with disabilities and may apply to severance packages if the employee claims that they were terminated due to a disability.
- The Age Discrimination in Employment Act (ADEA): The ADEA prohibits employment discrimination against individuals over the age of 40 and may apply to severance packages if the employee claims that they were terminated based on age.
- State labor and employment laws: Many states have their own labor and employment laws that may apply to severance packages. For example, some states require employers to provide certain types of severance pay or to follow specific procedures when terminating employees.
It is important to be aware of the applicable laws and regulations when negotiating a severance package, as these laws may affect the terms and conditions of the severance package, including the amount of financial compensation and the duration of benefits. An experienced attorney can provide guidance on the legal considerations involved in severance package negotiations.
Attorney-Client Privilege & Severance Negotiation Lawyers
The attorney-client privilege is a legal doctrine that protects confidential communications between an attorney and their client. This privilege applies to discussions related to negotiating a severance package, and it can provide the employee with the assurance that their discussions with their attorney will remain confidential.
When an employee consults with an attorney regarding a severance package, the attorney-client privilege applies to any information or advice that the attorney provides to the employee. This means that, in most cases, the employee’s discussions with their attorney cannot be disclosed or used as evidence in court without the employee’s consent.
The attorney-client privilege provides the employee with a safe space to discuss their concerns and receive legal advice on negotiating the terms of their severance package. For example, the employee may discuss potential legal claims related to their termination, the financial compensation and benefits offered in the severance package, and the potential impact of waiving certain rights.
In order for the attorney-client privilege to apply, the communication must be between the attorney and the client, must be for the purpose of obtaining legal advice, and must be kept confidential. The privilege applies regardless of whether the employee ultimately hires the attorney to represent them in the negotiation of their severance package.
The attorney-client privilege is a crucial aspect of the attorney-client relationship and helps ensure that employees can receive legal advice and representation from a qualified employment law attorney in the negotiation of their severance packages without fear of having their confidential information disclosed.
Several types of attorneys can assist in severance package negotiations, including:
- Employment Lawyers: Employment lawyers specialize in representing employees in legal matters related to their workplace, including severance package negotiations. They can provide legal advice on the terms of the severance package, help negotiate better terms, and ensure that the employee’s rights are protected.
- Labor and Employment Attorneys: Labor and employment attorneys represent employees in matters related to labor laws, employment contracts, and severance packages. They can assist in negotiations, help the employee understand their rights, and ensure that the severance package complies with applicable laws and regulations.
- Labor Relations Attorneys: Labor relations attorneys represent employees and unions in negotiations with employers, including severance package negotiations. They can provide guidance on the legal implications of the severance package and help ensure that the employee’s rights and interests are protected.
- Employment Litigation Attorneys: Employment litigation attorneys represent employees in lawsuits related to their workplace, including those related to severance packages. They can provide legal representation and help the employee pursue legal action if the severance package does not meet the standards set by law.
It is important for an employee to choose an attorney who has experience and expertise in the area of severance packages and employment law. The right attorney can help ensure that the employee’s rights and interests are protected and that they receive the best possible severance package.