Losing a job is not a pleasant experience. Depending on the reasons for termination, it can hurt your self-esteem and confidence and you may be anxious about the prospects of looking for a new position. Financial concerns also rear their ugly heads as you may be without a steady income for some time.
This is why severance packages are so important. When you have devoted years or even decades of your life to the service of a company, you are entitled to monetary rewards when you leave. A good attorney can help you negotiate the terms of a severance agreement to get a fair package that will sustain you while you look for other work.
Severance packages can vary significantly depending on numerous factors. That said, there are certain provisions that you should look for when agreeing to a severance deal.
Payment in a Lump Sum
Your company may wish to pay you in installments over time. Hire an attorney from an experienced law firm such as Tully Rinckey to negotiate for a lump sum payment. If you accept an installment plan, you run the risk of the company stopping payments before you receive the full amount. They may do this when you find a new job or for some other reason. You don’t want to give them the opportunity to do that. Also, If you apply for unemployment benefits, installment payments may reduce the amount you get.
Employers will sometimes insist on a non-disparagement clause in the agreement. This limits what you can say about the company or your former co-workers to contain negative statements. You want to make sure this goes both ways and that your former employer and co-workers cannot disparage you either.
The Ability to File for Unemployment Benefits
Every state has laws about qualifying for unemployment insurance. Make sure there is nothing in your severance agreement that will prohibit you from collecting benefits. There may be language about you being let go for poor performance or that you have resigned. Either of these cases can disqualify you from collecting unemployment benefits. This is another reason to have excellent legal representation such as the Tully Rinckey professionals on your side. Employers often use their lawyers to spell things out in legal terms that a layperson may not understand. Your attorney will ensure that you know what every clause in the agreement means.
Be Wary of Non-Competition Clauses
Your employer may want to add a non-competition clause. This is a condition that states you may not work for a company that competes in the same field as your former workplace. Broad clauses such as that are not enforceable and you probably won’t see one but be wary.
Non-competition clauses that are more narrow in scope are fairly common and are another reason you want a good attorney on your side. Such a clause may state you can’t work for a competitor in a specific geographic region. They might also specify a time frame such as six months or a year that you can’t work for the competition.
The penalties specified in these clauses are usually ceasing severance payments or may even allow the former employer to sue for breach of contract. A non-competition clause can severely limit where and when you can work and make your job search much more difficult. Be on the lookout for it as your attorney certainly will be.
Being terminated from a job is usually a negative experience but that doesn’t mean you can’t recover from it quickly. Severance packages are essential to sustaining you while you look for new work and making sure you are open to taking whatever job you like. A good attorney is invaluable in negotiating these contracts.