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Negotiating a Severance Agreement


When you have secure employment, you aren’t necessarily thinking about severance agreements. However, if you are terminated, it’s important to understand your potential rights and how to negotiate a severance agreement.

What is a Severance Agreement?

Severance agreements are legally enforceable agreements that can be drafted when someone is terminated from their employment. The agreement typically covers terms like how much severance pay you’ll receive, in exchange for getting you to give up your rights to sue the employer. In some cases, employers might try to get you to sign an onerous non-compete clause too.  Severance agreements are common during layoffs, but they can be used in other employment termination scenarios too.

Assert Your Rights

Before you sign any agreement, it’s best to take some time to think it over and talk to a Washington DC employment attorney. In some cases, employers try to take advantage of their employees in these situations, which is why it’s good to have an attorney look at the terms of the agreement.

You have the right to take some time to review the agreement and/or have an attorney review it. For example, if they try to force you to sign it immediately, or even the next day, it can be considered an unfair practice. If you are over 40, there are federal laws that protect you as well. Employers are required to give an employee 21 days to consider the terms, and if two or more employees are being laid off, any employee 40 and over must get 45 days. You also have seven days to revoke the signed agreement. Be wary of employers who try to violate this rule by wording the revocation clause to say on the close of business rather than midnight on the 7th day.

It’s also your right to negotiate the agreement as well. Don’t waive any claims that are related to your original employment agreement. An example is an employment agreement that includes a clause about what a severance package will be. If the employer tries to add on new terms now, like a non-compete clause, then they should be paying additional monies.

One way to leverage a better severance agreement is by asserting a legal claim. This is where employment attorneys can be helpful as there may be a situation at work that constitutes a breach of contract, discrimination, or more. If there is a valid legal claim for wrongful termination you can make, it increases your negotiating power.

If your employer refuses to negotiate with you, the next step is to file an administrative complaint with federal and state agencies. A lawsuit should be your last resort.

Retaining an Employment Lawyer

Negotiating severance agreements can be challenging, which is why it’s important to at least meet with a Washington DC employment attorney to discuss the terms of the agreement presented. The attorneys at Tobin O’Connor Concino P.C. have experience in employment and business law matters. Contact our office online or at 202-362-5900 to schedule a consultation today.

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