Why You Should Have a Lawyer Review Your Severance Agreement
Severance pay is the compensation given when an employee leaves the company, usually due to layoffs or other involuntary reasons. An employee receives the amount depending on their seniority and tenure with the company. Severance pay is computed based on a formula, usually one to two weeks of pay per year of service. In the US, LHH reports that severance packages are becoming more abundant, which increased to 72% from 2020 to 2025. Several companies review their policies, making their severance packages even more generous.
A severance agreement is a legally binding contract between an employer and an employee who outlines the terms and conditions of pay and benefits after termination. If you’re facing termination and have been dealing with a severance package, you can visit with a severance agreement lawyer near you.
This article will discuss why you need a severance agreement lawyer so you will not miss out on any long-term implications of the terms before you sign your severance agreement.
Understanding the Legal Language
Words such as “non-disclosure” and “release of claims” carry serious consequences for your rights and duties. So you should understand what each legal term means to prevent misunderstanding later on. For example, a non-disclosure agreement prohibits you from discussing the severance agreement, which poses a problem for actually talking about your experience.
A release of claims might also prevent you from suing your former employer. Take time to study the document. If something is unclear, do not hesitate to ask questions.
Business litigation lawyer Mike McLachlan says that a lawyer can help you sort out these terms and ensure that you understand fully what is in your agreement prior to signing it.
Identifying Hidden Clauses
Pay attention not only to important issues in your severance contract but also to the hidden clauses. Hidden clauses could have long-term consequences for your career and finances, so you really have to be extra careful in reading every part of your severance contract.
A lawyer will help identify these hidden clauses for you, explain their importance to you, and explain how they can affect your possible options once you exit your employment.
Protect your interests with a lawyer specialized in severance agreement law.
Protecting Your Rights
Make sure all of your rights are protected after having detected any undisclosed terms hidden in your termination contract.
A severance agreement lawyer can explain how these clauses will affect your next job, available benefits and legal options. They will find out whether the agreement contains clauses that limit your rights or expose you to potential liabilities.
You could be entitled to unpaid wages, vacation quarters, and health benefits continuation.
Hiring a lawyer can also help you understand the obligation of the parties and see to it that it will not include waiving such rights.
Negotiating Better Terms
Negotiating improved severance agreements can be advantageous for your financial future and job prospects. Never accept the severance offer without considering the stipulated terms.
You would want to ensure that severance pay, health benefits, and even references are included in the contract.
Negotiate confidently in presenting the contributions you have made to the company and the current trends in the severance packages in the market.
It is a wise decision to have a lawyer review your agreement prior to negotiation. They will help out potential areas to negotiate and even develop effective strategies.
Avoiding Costly Mistakes
As you deal with your severance agreement, it is very important for you to be aware of the dangers so you could prevent costly mistakes. Most of the time, employees miss the critical aspects to consider in their agreement, such as tax implications to those of non-compete clauses and their effects on future employment.
It could pose you risks if you fail to negotiate terms like continuous health benefits or final pay. Understanding every detail of the agreement will definitely benefit you in the long run.
Having a severance agreement lawyer can play a huge role in your protection. Their knowledge and expertise can help you identify any clauses stipulated in your contract that can be detrimental to your interests. You can be assured that seeking legal advice can help you confidently make informed decisions.