How To Approach Severance Agreements As An Employer

A severance agreement is a contract between you and one of your soon-to-be former employees. For anyone who hasn’t had experience creating (or receiving) a severance package, it is easy to fall into the assumption that it is merely a sum of money given to an employee you are terminating. That implies that the employer is giving something and receiving nothing. A properly drafted severance agreement can do far more than that. 

Shift your perspective on severance agreements. The agreement is a meeting of the minds—and there can be any number of things that go into a severance package.

Things To Include 

To think of a severance agreement as anything less than a complex contract that needs professional-level attention to detail is an underestimation. A contract can dictate a person’s behavior. If, for example, you don’t want your former employee to discuss a process used by the company, they may agree not to talk about it in exchange for the money contained in the severance agreement. 

In addition to the amount of money, you can address the other benefits the employee will continue to receive or not receive. This includes health care, accrued Paid Time Off (i.e., if they will be compensated for the time they have accrued), and even stock options in the company. 

For Your Benefit 

If that is what the employee is receiving, what can you expect in return? For one, you can include a general liability waiver. In exchange for a severance package, they agree to not take legal action against the company for wrongful termination or anything associated with it, such as discrimination. 

As mentioned previously, there may be details about the company you wish to keep private—including the severance package’s nature. This may also extend to the previously mentioned company process to stay within the company, especially if it isn’t legally protected as intellectual property. 

Did your employees ever sign non-compete clauses? If not, you can add one. Nothing says the employee won’t take their experience and apply to work at a company you are in direct competition with. Your severance agreement may prevent them from working within a designated area for a while.

Law Offices of Robert Dawson

Like any contract, a severance agreement is only as strong as the person who creates it. Our deep-rooted experience with employment law can be your greatest asset. If you have further questions regarding them, contact the Law Offices of Robert Dawson

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Law Office of Robert Dawson

You have more power than you realize. If you need a professional attorney who has built a reputation within employment and business law, contact the Law Offices of Robert Dawson. We are passionate about protecting our clients and pursuing their interests. Contact us for tailored legal solutions.

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