Protect Your Rights & Maximize Your Benefits By Bringing an Experienced Attorney to the Negotiating Table
Employers may offer terminated employees a severance agreement (sometime also called a Separation Agreement) to ensure the employee does not sue their former employer, disparage them publicly, and in some circumstances, compete against the employer with a new employer or by forming a competing business. Employees may benefit from signing a severance agreement because they will receive things from the employer they would not otherwise receive, usually in the form of compensation.
Common Employee Provisions in an Employee Severance Agreement
Hawks Quindel attorneys negotiate on behalf of their employee clients to secure common provisions including:
- Severance pay
- Partial or full employer contribution toward COBRA health insurance premiums
- Outplacement services paid by the employer
- A substantive letter of reference
- A pro-rated bonus payment
An employer must pay the employee for wages earned, accrued but unused vacation time (if they have a policy providing for such), and customary expenses incurred prior to the separation (again subject to their policy), even if the employee does not sign a separation agreement.
Common Employer Provisions in an Employee Severance Agreement
Employers typically want terms protecting their interests, including:
- Agreement the employee will not bring any legal claim against the employer
- A prohibition on the disclosure of the employer's trade secrets, confidential and proprietary information, or the existence or terms of the severance agreement itself
- A nondisparagement clause to prevent the employee from complaining publicly about either their employment or the circumstances of their departure
If the employee previously signed a noncompetition agreement, the severance agreement will usually reaffirm those terms. Some employers will attempt to include noncompetition terms in a severance agreement even if the employee did not previously sign a noncompetition agreement.
Negotiating Severance Compensation
No Wisconsin or federal law establishes any schedule for what amount of severance should be paid. Hawks Quindel attorneys discuss with clients the various factors affecting what an employer might be willing to pay, and for what period of time. If the employer seeks to include the federal Age Discrimination in Employment Act as part of the release of all claims in the employee severance agreement, federal law requires the employer must give the employee at least 21 days to review the agreement, and an additional 7 days in which to revoke their signature. The Older Workers Benefit Protection Act establishes these rules as a means to try to ensure an employee's agreement not to sue their employee is "knowing and voluntary".
If you have questions about a severance agreement you have signed or have been offered, please contact an employment lawyer at Hawks Quindel. Please call a Madison employee contract attorney directly at
(608) 257-0040 or a Milwaukee employee contract attorney at
(414) 271-8650, or email us via our
Contact Page.