In the professional realm, a separation or severance agreement is not one many people wish to see. These agreements are provided at the termination of employment and should offer an exchange that benefits both parties.
Separation Agreement Basics
Generally, a separation or severance agreement is an agreement that will ease the civil liability of the company while providing severance pay to the employee. This is most often when termination is due to layoffs or reasons other than poor performance. California doesn’t require employers to provide severance packages to employees, but they may choose to do so for many reasons. Including:
- Reduced liability
- Brand reputation
- Recruiting and retention
- Employee consideration
Employee Benefits
A separation agreement should benefit both parties with relative equity. One feature that makes them attractive for employees to agree to is that they often offer additional pay or benefits beyond the termination of employment. This may include continuing health insurance coverage for a time or even paying out benefits for paid time off. Though California does not provide guidelines for determining severance pay, the amount and duration of severance generally relate to the duration of employment.
Employer Benefits
The continuation of benefits and pay for a period is understandably attractive to an employee who does not know where or when they will earn their next check. However, there are many benefits the employer may receive that make this a favorable agreement for them. With recent California legislation making non-compete clauses invalid, that is not a valid component in a severance agreement. However, it is more common to see clauses or statements such as:
- Waiving the right to sue in civil court (you cannot waive your right to report crimes)
- Non-disparagement clause
- Waive unemployment
- State that you resigned
- Confidentiality
How We Can Help
Negotiating a separation agreement can become complicated and detrimental if you do not carefully consider what you are agreeing to. Suppose you have concerns about the legality of your termination or the circumstances that led to your layoff. In that case, you may benefit from working with a San Francisco wrongful termination attorney to help you negotiate the agreement. Outside of conflict with the employer, you may also benefit from speaking with an attorney to simply understand how to negotiate in a way that best suits your goals.
Considerations in a Separation Agreement
Most companies have an invested interest in providing a relatively fair agreement. However, there are some things you should consider before agreeing to a severance package. If you have concerns about what is being offered, you may benefit from speaking with an employment law attorney within San Francisco or any in California. This includes one-sided agreements, such as confidentiality or non-disparagement agreements.
You may consider negotiating a mutual non-disparagement agreement if you are leaving on a negative note or have other concerns about what they may say about you. Additionally, you should ensure you are clear on the expectations of the non-disparagement clause to ensure you are able or willing to comply.
It is also crucial to ensure you understand entirely any confidentiality agreements. Some may be specific about what you can and cannot share regarding your negotiations or severance, and some may be vague in language, leaving them vulnerable to interpretation.