Negotiation of Severance Agreements:

When an employer is about to terminate the employment relationship with one or a group of employees, it may be advantageous for both sides to enter into an agreement defining their rights and obligations. Such agreements are called severance or termination agreements. There are many advantages and disadvantages in such agreements and they must be read carefully, and often changed through negotiation, if possible. In any event, they must be fully understood as to their unintended consequences before they are signed.

Severance Agreement Negotiation or Legal Issue ResolutionFor example, such agreements often contain provisions against future competition (“non-compete” clauses) and confidentiality provisions relating to the agreement itself and the employer’s proprietary information regarding customers, pricing, and ways of doing business. Such provisions can provide the basis for unexpected and unwanted lawsuits against an unwary employee who subsequently goes to work for a competitor of his/her former employer, or who uses information he or she (and many others) may have known for years but that the employer claims to be “proprietary,” i.e., that the employer claims belong to him. Such disputes often involve the new employer with undesirable consequences.

At the lower end of the issues that must be addressed, but nevertheless of great importance to the individual employee, is the effect of such an agreement on the right to claim unemployment compensation, which may be lost or preserved depending on the agreement.

But perhaps most importantly, such agreements control the employee’s right to pursue his/her claims for prior acts of discrimination, harassment, equal pay, or wrongful termination. The employer’s main purpose in most cases is to obtain a broadly worded release from the employee, guaranteeing that all such potential claims, however legitimate, are released and barred forever. The employer is buying “peace of mind.” Obviously, no such agreement should be signed without a thorough review to determine whether valuable employee rights are being bargained away. The appropriateness of a severance agreement can never be determined simply by reading the words on the page: first, it is necessary that the potential for legitimate and valuable claims be evaluated before they are bargained away. And that includes claims you may never have thought of.

Having negotiated and drafted many such agreements, we can help you through the maze of issues and trade-offs that are basic to such negotiations, and help you protect your rights, either as a departing employee or as an employer seeking protection from subsequent “surprise” law suits.

Contact Us

You want an attorney who will be committed to meeting your needs at every step along the way.  At the firm of William A. Feldman, LLC, we represent individuals and businesses in cases of all kinds.  Contact us today for more information and to discuss your issue.

One Passaic Avenue
Fairfield, NJ 07004-3814
Telephone: 973-244-7944
E-Mail:  wfeldman@wafnjlaw.com

 
 

At the Fairfield, New Jersey law offices of William A. Feldman, LLC we represent people throughout Northern New Jersey, including Wayne, Clifton, Nutley, Paterson, Passaic, Hackensack, Oakland, Short Hills, Livingston, West Orange, Newark, Belleville, Bloomfield, Montclair, Verona, Morristown, Parsippany, Chatham, Mendham, Newton, Sparta, Franklin Lakes, Bloomingdale, Little Falls, Pompton Lakes, Franklin Lakes, Morris Plains West Paterson, West Milford, Ringwood, Essex Fells, Fairfield, Montville, Caldwell, West Caldwell, Passaic County, Morris County, Essex County, Bergen County, and Sussex County.