Employment Law FAQs: Is My Severance Package Fair?

I receive plenty of phone calls and e-mails from employees and executives asking if their severance packages are fair. These individuals tend to have the same general questions involving provisions of their severance agreement, the amount of compensation they may or may not be receiving, and if they need an attorney.

In most situations, an attorney can provide benefits to an employee who is exiting their employment in a planned fashion. At the very least they can provide explanations of certain provisions and advice on how to handle certain post-employment issues. Best case scenario, an attorney can advise you on how to obtain more favorable results or point out problems with an agreement.

Here are three common severance questions and my answers:

  1. Is the money enough? Answer: I don’t know, or at least not by just hearing a dollar amount. Some severance packages follow very specific contractual or tax rules that would allow me to answer the question after reviewing the contract. Other severance offers are fact dependent and I would need to know why the employment is ending, if there is any liability stemming from the termination, the type of employment/employer, and what the traditional severance pay-outs at the company are.
  2. What if someone calls my soon-to-be-former employer to ask about me? A fair number of agreements I see have mutual non-disparagement clauses. If not, I recommend that an employer or employee request such a clause. Working out the specifics on how to handle a mutual agreement can provide some predictability to the departing employee and the employer that everyone will remain professional.
  3. What about my non-compete agreement (NCA)? I am running into more and more of these agreements in a wide variety of positions and professions that would be unexpected. In general, the Courts are hesitant to enforce overly restrictive NCAs. However, there are many concerns that may surface regardless of the Court’s trends. A conversation identifying risk requires very detailed factual analysis and discussion with your attorney. If you want to know precisely how to avoid any disputes you should speak with your employment attorney prior to any potential violation of your agreement. If you do not know what could be considered a violation of the agreement it is even better to contact your attorney before you end up in a court room.

Again, these are general answers. Please don’t take my answers as legal advice to your specific situation as my responses are provided in the most general terms. My hope is that those people seeking to contact an attorney will be better prepared.

Keep an eye out for my next post which will address in greater detail the Non-Compete issues briefly touched upon above.

This post is second in a series of Employment Law FAQs, Common Questions Posed to an Employment Attorney and is a follow up to “Was I Wrongfully Terminated?” If you have specific questions regarding your severance package, you can follow up with Attorney Williams at (206) 624-6271.