Severance agreements are regularly used by Pittsburgh employers. Deciding whether you should accept a severance agreement can be difficult. In exchange for compensation, an employee must give up his or her right to pursue a legal claim against the employer. The skilled employment attorneys at Jones Gregg Creehan Gerace are prepared to help you understand the ramifications of a severance agreement with your best interests in mind.
We’ve been reviewing severance agreements and advising clients for decades and work diligently to ensure our clients receive the best possible severance agreement. We know how to negotiate severance agreements. If you have a valid legal claim against your employer, we can help you pursue your legal rights.
What Is a Severance Agreement?
A severance agreement is a contract between an employer and an employee leaving the company. It’s also called a termination or separation agreement, specifying an employee’s termination terms. The agreement should outline the severance pay the employee will receive and how the compensation will be paid. Most severance agreements also outline whether the employee will receive compensation for unused vacation pay and interim health insurance benefits.
The employer may include a confidentiality agreement, non-compete clause, or restrictive covenant. Generally, severance agreements include a provision requiring the employee to waive his or her right to sue the employer, commonly called a release of claims provision. In exchange, the employer will offer the employee “consideration” through extended health insurance benefits and severance pay.
Are Severance Agreements Enforceable?
In the absence of another contract or agreement that entitles you to receive severance pay, your employer has the right to require you to sign a severance agreement to receive compensation. Employers are motivated to issue severance agreements to avoid potentially expensive lawsuits from former employees.
However, Pittsburgh employers cannot coerce former employees to sign a severance agreement. For example, employers cannot threaten to withhold wages or pay the employer money he or she has already earned. Pennsylvania courts will generally enforce severance agreements when they meet the following conditions:
- They don’t violate laws, such as anti-discrimination laws
- They are reasonable in scope when requiring the employee to waive his or her right to bring a legal claim against the employer
- The contract is supported by considerations other than money the employee has already earned
Finally, both parties must have knowingly and voluntarily signed the severance agreement. The employee must have had a reasonable amount of time to consider his or her rights and responsibilities under the agreement and consult an attorney.
Should I Sign a Severance Agreement?
Many employees will quickly sign a severance agreement because they are understandably concerned about their ongoing expenses without compensation from the severance agreement. They may not realize they’ve signed a legally binding contract and waived some of their most important legal rights.
Before you sign a severance agreement, you should always speak to an attorney. If your employer tries to pressure you into signing the severance agreement right away, do not succumb to the pressure. They should give you a reasonable amount of time to sign the agreement so you can speak to an attorney. If signing the agreement would waive your rights under the Age Discrimination in Employment Act, your employer is legally required to give you at least 21 days to speak to an attorney.
The Benefits of Discussing the Severance Agreement with an Attorney
Speaking to an attorney is crucial because your attorney can help you understand whether you may have a right to pursue a legal claim against your employer. The first severance agreement your employer presents to you may not have favorable terms for you. An attorney can carefully review the severance agreement and try to find any opportunity to strengthen the agreement in your favor. An attorney may be able to negotiate better terms, including more compensation and better benefits.
Pursuing a Legal Claim Against Your Employer
Employees who sign a severance agreement waive their right to bring a lawsuit against their former employer. If you have a potential legal claim against your employer, it may be more beneficial to not sign the severance agreement and pursue the legal claim for compensation.
If your employer unlawfully discriminated against you or allowed sexual harassment to continue at your former workplace, you have the right to pursue compensation. Employers cannot take adverse actions against employees based on their age, race, gender, gender orientation, disability, parental status, or membership in another protected class.
Effectively Representing Pittsburgh Employees
The attorneys at Jones Gregg Creehan Gerace will carefully review your severance agreement to ensure it complies with state and federal anti-discrimination laws. When we meet with you during your initial consultation, we will gather information and ask you questions about your terms of employment and the circumstances surrounding your termination.
We’ll also carefully review the severance offer to determine whether you’ve been the victim of discriminatory practices. For example, suppose your employers terminated your position because you are over the age of 40 but claimed they were merely reducing their workforce. In that case, we can help you pursue an age discrimination claim. We will also ensure your employer hasn’t engaged in fraud or misrepresentation, age and hour violations, and other state and federal law violations.
What If I’ve Already Signed a Severance Agreement?
If you’ve already signed a severance agreement, speaking to an employment attorney can still be beneficial. The severance agreement may not be legally enforceable. The terms may be unreasonably restrictive. Your employer may not have given you reasonable time to review the agreement. An attorney can help you understand whether the agreement is legally enforceable and whether you may have grounds to pursue a legal claim against your employer.
Contact a Pittsburgh Severance Agreement Attorney
When your employer presents you with a severance agreement, discussing your case with a skilled attorney is crucial. The Pittsburgh employment attorneys at Jones Gregg Creehan Gerace are prepared to review the severance agreement, answer your questions, and help you understand your legal options. We also help employers draft legally valid, comprehensive severance agreements. Don’t hesitate to contact Jones Gregg Creehan Gerace to schedule a complimentary case evaluation and learn more about how we can protect your rights.