Severance agreements outline the terms of an employee’s termination or departure and typically provide employees with some benefits. Although not required, many employees may offer severance packages to their employees to provide some assurance that they will have financial protection if they lose their jobs. Employers may also offer severance agreements if they need to unexpectedly layoff a good employee or want to avoid a potential conflict with an employee they plan to terminate for misconduct or negligence.
Before agreeing to the terms of a severance package, consider having one of our Virginia severance agreement lawyers review it. Our experienced employment attorneys at The Spiggle Law Firm work to ensure employees are offered fair terms and are not taken advantage of.
Types of Severance Agreements
Severance agreements may be used in situations including but not limited to:
They may provide employees with a financial benefit such as a lump sum payment or an ongoing income stream to help support an employee once they leave their current position. In addition to money, severance packages may include the continuation of other benefits such as health insurance. Severance agreements could also contain restrictive terms such as non-compete or non-solicitation agreements.
More complex severance agreements may require ongoing administration and installment payments, while others may consist of a single lump sum payment. The value of a severance package may be determined at the employer’s discretion or it may be more formally calculated based on an employee’s length of employment and compensation.
Waiving Your Rights in Virginia Agreements
As a condition of receiving a severance package, employees may also be required to waive any potential claims against their employer. This shields employers from potential lawsuits arising out of the circumstances surrounding an employee’s termination. If you think you may be giving up crucial civic rights, do not hesitate to consult with our Virginia severance agreement lawyers.
Severance agreements often require employees to waive their rights to make legal claims of discrimination against their employer. In order to be valid, waivers of claims under anti-discrimination statutes must be made knowingly and voluntarily. Additionally, waivers must not extend to potential future acts of unlawful discrimination.
Employee Retirement Income Security Act (ERISA)
ERISA is a federal law that applies to employee benefit plans. In some instances, a severance agreement may qualify as a benefit plan under ERISA. If a severance agreement is subject to ERISA, it must comply with this legislation.
Whether a severance agreement is governed by ERISA depends on its stipulations. Agreements under ERISA are usually ongoing and involve a series of payments as opposed to a lump sum. When severance agreements are not properly administered under ERISA, employers can be liable for this violation of contract. A Virginia severance agreement lawyer could help you hold your employer liable for said violations.
Getting in Touch with a Virginia Severance Agreements Attorney
Our Virginia severance agreement lawyers are prepared to review, and if necessary, negotiate and challenge your severance agreement. We want to make sure you are receiving the representation you need to get you the most favorable results possible. If you have a potential severance case based on discrimination, you can calculate your its value here. To schedule your consultation or to have your severance agreement reviewed by The Spiggle Law Firm, click here.
What is a Severance Agreement?
A severance agreement is a contract between an employer and departing employee where they each exchange something of value to each other. Generally, the employer gives cash and employment-related benefits to the employee while the employee gives the employer certain promises, such as not to sue the employer and maintain the confidentiality of information learned while on the job.
Severance agreements are not to be confused with severance packages. With severance packages, there is no contract and the employee receives the money or benefit with no strings attached.
Elements of a Severance Agreement
The exact provisions of a severance agreement will depend on a number of facts surrounding the employee’s departure. However, severance agreements have two primary sections, one that benefits the employee and one that benefits the employer.