A severance agreement makes financial sense for departing employees, but these contracts can also carry provisions that impact your future. You may see no cause for concern when you review the terms and conditions, but you may not be able to spot the pitfalls if you don’t have a legal background. In addition to the monetary incentives, there are often one-sided clauses that are intended to promote the interests of your employer. When you’re leaving a company and are presented with a contract, it’s smart to retain a Chicago severance agreement attorney to review the document before you sign. A lawyer can help you negotiate any language that would have negative implications for you, including:
Tricky Payment Terms
If your original employment agreement included severance payments upon your departure, you don’t need to sign a new contract in order to obtain the funds. Still, a crafty employer may encourage you to execute a second severance agreement to add to your obligations. This is contrary to contracts law, as the consideration for the first agreement is sufficient. To be enforceable, a separate severance agreement must provide more benefits as compared to any package you’re already legally entitled to receive, such as payments for unreimbursed expenses or paid vacation time.
Your Interests in a Release of Claims
A primary motivation for your employer to request that you execute a severance agreement is to ensure that you release them from all potential legal claims – including anything that may arise in the future. Release clauses that many companies use are typically drafted to favor their own interests, so you’re left without options if something does come up. A lawyer can review how the release would apply to your specific situation, but you should definitely not release unemployment claims, benefits that extend beyond your employment, and stock options.
Unreasonable Restrictive Covenants
Illinois case law addresses restrictive covenants, such as those that might be included in your severance agreement. For instance, a court will enforce a non-compete clause where it’s ancillary to a valid contract and supported by proper consideration. This could have major impact on where you can seek employment and in what capacity. A lawyer can advise you on whether it’s in your best interests to agree to a restrictive covenant.
Overbearing Duty of Confidentiality
Your employer has an interest in keeping the terms of a severance agreement confidential, but you may need to discuss the provisions with certain individuals. A lawyer can help you negotiate clauses that allow you to reveal the contents of the agreement to your family, financial advisers, and others.
Contact a Chicago Severance Agreement Attorney
The financial package may seem attractive as you’re departing your employment, but it’s important to keep in mind that your employer is protecting its own bottom line with a severance agreement. You even the legal playing field when you consult with an experienced lawyer to represent your interests and negotiate terms that protect your future. For more information on severance agreements and other employment contracts, please contact the Law Office of Mitchell A. Kline. We can answer your questions or set up a consultation at our Chicago office.