While a severance package can ensure continued pay or benefits after you've been laid off, it can also limit your options for future employment.
If you are uncertain about what to do, a severance lawyer can help you negotiate a more favorable package.
Meet with attorney Dan A. Atkerson in Allen, TX, to talk about your options...
A Skillful Negotiator for Severance Pay
What Is a Severance Package?
A severance package is a “package” of benefits and corresponding restrictions that is negotiated between a company and an employee when employment is terminated. Often, a company is willing to provide certain benefits, such as severance pay, insurance benefits, or assistance in finding alternative employment, in exchange for an employee agreeing not to spread bad word or pursue litigation against them.
This promise not to disparage, or “bad-mouth,” your former employer is increasingly more valuable to companies as the power of social media continues to rise. After all, no company wants a bad Yelp! or Google review.
If rumors of potential layoffs are circulating around your workplace, you may want to resist the temptation to quit before the ax falls so that you can potentially claim severance benefits. However, because negotiating these benefits can be complicated, it can be to your benefit to consult with a Texas law firm that specializes in employment law.
Set up a Consultation Today
If you need to negotiate a favorable severance package or if your employer has committed some type of employment law violation, contact our attorney today. In Allen, TX, the Law Offices of Dan A. Atkerson offer a free consultation to discuss any of your employment law concerns. You can schedule your free consultation by filling out our online form or calling:
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"Dan did an outstanding job of getting the severance package from my previous employer when they didn't want to pay! He was professional and followed up quickly. I would highly recommend him." John Bugh - 5-Star Google Review - 2019
Possible Benefits in a Severance Package
The benefits you can expect from a severance agreement will vary greatly, depending on your situation. How favorable their terms are to you will depend primarily on your bargaining power. For example, the benefits of a severance agreement may include:
Possible Restrictive Covenants
A worker’s severance agreement will also likely include certain restrictions designed to benefit the company, such as:
- Non-Compete Agreements: A non-compete agreement is any agreement not to work for a direct competitor for a specified period of time, in a specified area, or performing specified duties. Depending on the state, these can be difficult to enforce because courts generally consider them to be restraints on trade and barriers to an individual’s right to engage in the profession of their choice. In Texas, for example, non-compete agreements must be a part of an otherwise valid employment agreement, be reasonable in scope, and be designed to narrowly protect a company’s legitimate business interests. Otherwise, they are considered illegitimate.
- Non-Solicitation Agreements: These are typically agreements not to solicit or do business with the former employer’s customers. Non-solicitation agreements may also restrict a former employee’s solicitation of the former employer’s key employees.
- Non-Disclosure Agreements: Non-disclosure agreements are typically agreements not to use or otherwise disclose the former employer’s confidential business information, which may or may not constitute “trade secrets.” These types of agreements are typically enforceable in almost all states, as long as they fall within reasonable limitations.
- Release of Claims: Companies will almost always, if not always, require a release of claims as part of any severance negotiation. This is an agreement by the worker to release all legal claims they may have against the company. Although it sounds simple enough, there are potentially some very important clauses involved. For example, whether you are releasing all claims that you know about at the time or all claims both known and unknown. However, unknown claims could potentially be very valuable to an employee and very detrimental to an employer. As a result, agreeing not to pursue litigation for unknown claims requires a proportionate increase in benefits from the severance package.
- Cooperation Agreements: Cooperation agreements are relatively rare in the field of restrictive covenants. These agreements simply require the employee to cooperate fully with any pending or future legal proceedings or investigations involving the employer, within reason.
These types of agreements, also known as restrictive covenants, can be complicated and usually vary greatly from state to state. Therefore, if you are subject to any of these types of agreements, it’s best to consult with an attorney, lawyer, or law firm that specializes in employment law. Our law firm in Allen, TX, helps clients review severance agreements.
Our attorney meets with prospective clients for an initial consultation totally free of charge. If you live near Allen, Texas, and you are dealing with a legal issue related to severance, schedule your free consultation with our law firm today by contacting us online or calling (214) 383-3606.
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Negotiating a Severance Package
It’s important to remember that restrictive covenants, like most types of agreements, are subject to the parties’ desire to negotiate. As mentioned above, employers are typically interested in avoiding litigation. As an employee, it may be in your best interest to negotiate the terms of these restrictive covenants before you are hired, when you have the greatest bargaining power.
However, this is not helpful to employees who have already been working at the company. Many employees are simply too distracted with the excitement of starting a new job to be concerned with the ramifications of losing the job at some point in the vague and distant future. That’s why it’s important for employees who find themselves in the unexpected position of losing their job to consult with an employment attorney to help them negotiate a fair severance package or severance agreement.
When walking into a negotiation, it is important to keep several questions in mind. As an employee, are you being asked to leave because of cost-cutting measures, or because of a bad employment record? How valuable would you be as an employee of a competing business? How damaging to the company could you be, regarding social media in particular, if you left on bad terms? The answers to these questions will have a direct impact on what your severance package will look like.
Accepting a Severance Package
Unfortunately, employers often pressure employees to immediately sign an offered severance package or severance agreement during an exit interview. This is often an indication that the company has reason to benefit from your immediate agreement. It may be that the package offered is substandard, the company may be worried about some unmentioned legal exposure, or they may be trying to avoid the need for negotiations. They may even resort to telling you that the offered severance package will come off of the table unless it is signed immediately.
You should resist this temptation and stall for time to thoroughly review all documentation. It may be wise not to mention that you are considering seeking the advice of an attorney, as this may put them on the immediate defensive and potentially taint future negotiations. However, your best option is to seek the advice of an attorney, lawyer, or law firm that specializes in employment law, especially if the attorney provides a free consultation. An attorney can assess your unique situation and advise you of your various options, and even file appropriate claims if need be.
It is also important to remember that if you do intend to speak poorly of your former company after you leave, especially in a public capacity, you must be careful not to run afoul of defamation laws. Not only will you likely break the terms of your severance package, but you might find yourself on the wrong end of litigation in the form of a slander or libel lawsuit. You should discuss this possibility with your attorney before accepting any offer.
Keep in mind that you will typically have around 14 to 21 days to accept a severance offer, and sometimes even up to a week to change your mind after any such severance agreement is signed.
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"Dan Atkerson helped me with a separation agreement from my previous employer. He was very helpful, responsive, and professional throughout the entire process. He helped me get through the entire process very quickly. I would certainly work with Dan again and recommend him to others!" MT - 5-Star Google Review - 2019
Your Legal Options
If you have a severance agreement or are subject to a severance package that prohibits you from working in your chosen field, you may need to talk to a law firm that specializes in employment law. An employment attorney can help you negotiate a more favorable severance package.
At the Law Offices of Dan A. Atkerson in Allen, TX, we help clients from Frisco, Plano, DFW, and throughout all of Texas with their employment law concerns. Mr. Atkerson has been fighting against employment law violations in Texas for over 36 years, including wrongful termination, sexual harassment, employment discrimination, and more. He has been practicing since he was admitted to the State Bar of Texas in 1984 and he began his own individual practice in 2001.
He has assisted numerous clients of Fortune 500 companies with diverse employment law claims, including sexual harassment, wrongful termination, and unpaid wage claims. He is known among his clients for his friendly personal service and his sympathy toward clients’ needs. He doesn’t rush clients off the phone but rather will hear them out and personally make sure their needs are met. He will sit down with you to help you sort out your various options and suggest appropriate action.
Additionally, he works on a contingency basis, so you do not have to worry about paying legal fees until after your case has been settled: he only gets paid if you do.