Federal Employment Law – Dismissals and severance pay
A severance agreement is a contract, or legal agreement, between an employer and an employee that specifies the terms of termination of employment, such as a layoff. This agreement is sometimes called a “separation” or “termination” agreement or a “separation, general release, and no-lawsuit agreement.” Like any contract, an indemnity agreement must be backed by “consideration.” Consideration is something of value that a person is not yet entitled to and that is given in exchange for an agreement to do, or refrain from doing, something.
The consideration offered for the waiver of the right to sue cannot simply be a pension benefit or the payment of vacation earned or sick leave to which the employee is already entitled, but must be something of additional value to any of the rights existing employee. . An example of consideration would be a lump sum payment of a percentage of the employee’s annual salary or periodic payments of the employee’s salary for a specified period of time after termination. Employee signature and retention of consideration generally indicates acceptance of the terms of the agreement.
Federal law, the OWBPA, establishes specific requirements for a “knowing and voluntary” disclosure of ADEA claims to ensure that an employee has every opportunity to make an informed decision about whether or not to sign the waiver. There are additional disclosure requirements under statute when requesting exemptions from a group or class of employees. Even when an exemption is eligible, an age claim exemption, such as Title VII exemptions and other discrimination claims, will be invalid and unenforceable if an employer used fraud, improper influence, or other inappropriate conduct to force the employee to sign it. . or if it contains a material error, an omission or an incorrectness.
When employers decide to reduce their workforce by laying off or laying off a group of employees, they generally do so under two types of programs: “exit incentive programs” and “other layoff programs.” When an exemption is offered to employees in connection with one of these types of programs, an employer must provide sufficient information about the factors it used in making selections to allow employees who were laid off to determine whether older employees were laid off while the older employees were laid off. more young people were retained. . Even if you are amicably parted ways with your employer, be sure to ask for advice on whether you should sign it, whether the terms are reasonable, and whether you should ask your employer to change any of the terms. Make sure you understand what you are giving up in exchange for severance pay or benefits. Your employer has its own attorneys and its human resources department working against you. You need human resource and legal experts on your side to help you get the best compensation package!
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