Chicago Severance Agreements Attorney
In some countries, like Mexico, a company is required to provide a defined amount of severance pay if an employee is terminated. In others countries, like Canada, the employer is required in most circumstances to give an employee an advance notice of termination. However, employers in the United States do not need to do these things.
Most employees are “at will”, which means that an employee can quit at any time, as well as their employment can be terminated at any time. Since this creates risks for both the employer and employee alike, a severance agreement is often used in order to help resolve these potential issues.
The Nature of Severance Agreements
Although the employer or the employee may terminate the employment relationship at any time, both parties will tend to try to avoid doing so because of the damage it can do. When an employee quits without notice, the employer faces the potential issue of having no one being able to fill the position, until they can find a replacement. When the employer terminates an employee without notice, the employee is suddenly without income, until he or she finds a new job.
In order to accommodate the employer, an employee will often give their “notice” in order to notify their employer that he or she will be quitting. During that time, the employer will typically look for a replacement. In the event that a company gives an employee notice of termination, it is often easier to pay the employee a sum of money, known as severance pay, and let the employee go immediately.
A company will rarely provide severance pay without a severance agreement, which requires the employee to waive certain rights, and those rights often have significant value. However, these rights should not be waived without first discussing the proposal with a severance agreement attorney.
Negotiating A Severance Agreement
There are three typical ways that negotiations of severance agreements may come about. One situation is where a terminated employee has been offered a severance agreement. Another situation is where an employee may want to terminate their employment, seeking a severance agreement attorney to negotiate severance. The third situation is where an employee has been fired, with no severance agreement, but he or she now approaches the employer seeking one.
In the event that a company offers a severance agreement, it does not mean that an employee should simply accept it because the employee may be waiving important rights. For example, if an employee is faced with wrongful termination, they may have rights that are worth more than the severance agreement will give them. The severance agreement may include a non-compete, which would make it hard for an employee to find other work.
It is always necessary for an employment attorney to review a severance agreement. A severance agreement attorney will discuss several things with you, including what you want to do for work in the future, and the reason you were terminated. This information will enable the employment attorney to find any traps; any claims you might be waiving, as well as put you in a position to negotiate the severance agreement accordingly.
If you wish to leave your job, it is worth talking to an employment attorney in order to determine if a severance agreement may be negotiated. A severance agreement provides the employer certain protections and often it is good policy for a company to give severance pay.
In Illinois if you have earned vacation time, your company must pay you for any unused vacation. If a severance agreement simply provides vacation pay, the agreement is likely invalid since it does not meet the standards of a contract and you are automatically entitled to vacation pay anyway.
Impact Of The Older Workers Benefit Protection Act (OWBPA)
Since companies seek to have their employees waive their rights when signing a severance agreement, they must meet certain conditions. In order to have the employee successfully waive age discrimination claims, the severance agreement must comply with the Older Workers Benefit Protection Act (OWBPA). This act requires that the employee, who must be 40 years of age or older, have a minimum of 21 days to review the severance agreement before signing it, and have a minimum of seven days after signing it to revoke his or her signature. This often results in companies refusing to pay any severance pay until seven days after the agreement has been signed.
Nonetheless, because companies often use the standard form severance agreements, provisions to comply with the OWBPA may be included in your severance agreement, even if an employee is under 40 years of age. Often times, an employment attorney can negotiate in order to get the severance pay faster since the OWBPA provisions are not necessary.
If you have been asked to sign a severance agreement, you should review it with an employment attorney and consider your rights carefully since you may be waiving causes of action against your company. At Maduff & Maduff our Chicago Severance Pay and Severance Agreement Attorneys have negotiated with numerous companies to increase the severance payments, on behalf of our clients.