Negotiating an acceptable severance agreement

On Behalf of | Oct 26, 2021 | Employment Law

Nobody wants to lose their job, but it happens. If it ever happens to you, it can help to know that you have severance pay waiting for you to help you make ends meet until you get a new job.

Though Wisconsin law does not require it, many employers negotiate severance agreements with their employees. A severance agreement is a type of contract between employer and employee. Often, the employer presents an already-prepared agreement to an employee they are terminating. The amount of compensation usually is based on the employee’s salary and how long they worked for the employer.

More choices than ‘take it or leave it’

That does not necessarily mean you can’t negotiate. Most often, an employee will reject unfair elements of the offered package if they believe they have a legal claim against the company, such as for wrongful termination, employment discrimination, or something similar. If the value of that claim is potentially larger than what the employer is offering in the severance agreement, it may be worth it to the employee not to sign because most severance agreements require the departing employee to waive any and all legal claims against the business.

Another consideration is the noncompete clause, which will limit where and in what industries you can work in the future. These are fairly common to protect proprietary secrets, but an employer may try to impose overly strict terms — for example, asking you to agree not to work for any competitor within the entire country or for the next three years. A noncompete clause that would make it almost impossible for you to make a living is one that you might have to challenge.

An employment attorney’s assistance

If there are terms in your severance agreement that concern you, you should have time to consult an attorney. Your lawyer can review the offer and advise you on what to do to help preserve your career. Alan C. Olson & Associates helps workers deal with these complex issues.


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