Separation (Severance) Agreement Massachusetts
What is a Separation Agreement?
A separation agreement or severance agreement is a contract between an employer and an employee created once the employee is terminated. The agreement involves an offer of pay to the leaving employee, in exchange for the employee releasing any claims against their employer. Essentially, it protects employers against their ex-employees potentially badmouthing, suing, or otherwise harming the company after their termination, in exchange for a dollar amount. It should be noted that Massachusetts is an employment-at-will state, and thus employers in the state have no requirement to give a severance package to their employees.
What a Severance Package Includes
There can be many different pieces to a severance agreement, chief among them being the benefits that are given to the employee after departure. This most often includes some set amount of pay, with the average severance package offering two weeks of pay for every year worked. It can also involve a continuation of insurance benefits or other perks.
In exchange for your severance package, you must agree to your employer’s terms, which can vary. Oftentimes this will include signing a liability waiver, which is a guarantee that you won’t pursue legal action against your employer in the future. Your employer may also require you to comply with a non-disclosure agreement (NDA), as well as any other potential requirements such as a non-compete or non-disparagement clause.
When Not to Sign a Severance Package
There are a variety of reasons as to why you should think twice before potentially signing a severance agreement, chief among them being if you simply don’t think the package is adequate. If you feel that the compensation provided in the agreement is too little, avoid signing the agreement. In most cases, severance packages are negotiable, so don’t worry that you’re missing out!
Another major reason to hold off from signing to the agreement is if you think that you’d like to take legal action against your employer in the future. The liability waiver that will likely be included in the agreement will prevent you from being able to do so, so keep this in mind when negotiating your severance agreement. Other reasons to hesitate before signing could include if the package restricts your future employment prospects, or if you simply don’t fully understand the agreement.
How to Negotiate a Severance
When negotiating with your employer about the terms of your severance agreement, there are several factors to consider. Obviously, the payment and compensation portion of the package should be adequate and conferred over, but so too should any unused vacation time and other accrued PTO. You should discuss whether or not company equipment like a computer will be allowed to be kept, and if you have non-vested stock in the company whether or not it can be taken advantage of.
The other major pillars of your severance package to be negotiated is your insurance and retirement plans. In many cases you’ll be able to keep your old insurance coverage until you find new employment. Retirement plans will vary greatly from company to company, so be sure to review company policy to get a better grasp on what kind of benefits you may still be eligible to receive after termination. Finally, some employers may even be able to support you in your transition to different employment via outplacement resources, which may be something worth negotiating for in your agreement should you need it.
My Employer Is Not Honoring the Severance Agreement
In the case your employer fails to deliver a severance package to you when one was initially promised, you have options when it comes to taking legal action against them. Both written and oral contracts promising a severance package are binding, and thus can win you the severance you’re owed in court. To do that however, you’ll need to hire an attorney familiar with employee law who can assist you in proving that you were owed severance and in finding and presenting the evidence needed to win your case.
If your severance agreement plan is regulated by the Employee Retirement Income Security Act (ERISA) then you may appeal your severance denial, and potentially avoid needing to head to the courts. Should your appeal get denied however, then you still need to file suit.
Severance Agreement Attorney
Hiring an experienced attorney with extensive knowledge in the field of employment law is vital for ensuring you get the most benefit out of your severance package as possible. Your attorney will assist you in every step of the process of negotiating your severance agreement, and help you to fully understand what the agreement entails before you sign. Not having an attorney to support you throughout the severance process will put you at a serious disadvantage as most severance agreements are drafted by the employer and thus favor their interests. A skilled attorney will fight for you and ensure you don’t lose out on any potential benefits or unwittingly put yourself in a poor legal position in the future due to your severance agreement.
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