Severance agreements are contracts entered into with an employer that specifies compensation when an employee is terminated. They are commonly offered to an employee in exchange for releasing the employer from liability for any legal claims against them. Before you sign such an agreement, it’s crucial to ensure the terms and conditions are in your best interests.
Foregoing legal action against your employer by executing a severance agreement upon termination can have a significant legal and economic impact. The attorneys at Stember Cohn & Davidson-Welling LLC understand that deciding whether to accept a severance agreement can be complicated — and have long-lasting consequences. We are committed to assisting you with understanding the provisions in the contract presented to you and offering skillful guidance when you need it the most.
Pennsylvania is an “at-will” employment state — and an employee may be terminated for any reason, as long as it is not discriminatory. An employee might also have a legitimate reason to resign from their position and can do so at any time. In either case, an employee may be able to negotiate severance pay. This compensation is usually part of a full severance package outlined in a separation agreement, also known as a severance agreement.
Every severance or separation agreement is unique. Unless the terms and conditions were already agreed upon when you signed your employment contract, a severance package can be changed at any time. In addition to containing terms regarding severance pay, a separation agreement may also include provisions for the following:
Regardless of the reason for termination, the employment and labor attorneys at Stember Cohn & Davidson-Welling are adept at negotiating severance agreements to secure optimal terms on your behalf. We also offer consultations for severance agreement review, in which we identify areas of concern and advise as to potential modifications. If the circumstances surrounding the termination give rise to a discrimination or other legal claim, you may be able to recover more by negotiating more favorable terms or commencing legal action. In such cases, we will diligently advise you as to the best course of action to pursue.
Whether you were presented with a severance agreement as part of your initial employment contract or at the time of termination, it’s critical to carefully consider the pros and cons of signing it. No matter how much compensation you’re being offered, not every severance agreement is fair to an employee. Although severance pay is not required under Pennsylvania law if you’ve been terminated or resign, you may still be able to negotiate terms and conditions that are more favorable. In every severance negotiation, our overarching goal is to leave nothing on the table.
Unfortunately, employees all too often enter into severance agreements without fully understanding the legal rights they might be waiving. Not only can this result in you not receiving the compensation you might be entitled, but certain terms in a severance agreement (such as noncompete clauses) can effectively make you unemployable. It’s vital to consult with an experienced employment attorney to ensure your agreement does not adversely affect any prospective employment and opportunities for professional growth.
It’s also important to consider the enforceability of a severance agreement. A severance agreement is not valid if it violates the law, or your employer threatened you into signing it. The agreement must be signed voluntarily, and the terms must be reasonable. If it contains problematic provisions, it’s necessary to address them to ensure you aren’t relinquishing your rights.
Additionally, under the federal Older Workers Benefit Protection Act — which is part of the Age Discrimination in Employment Act — certain protections are afforded to workers who are 40 and older. In these cases, an employer must provide the employee no fewer than 21 days to review the severance agreement before executing it. The employee must also have a period of at least seven days after signing the agreement to revoke it.
At Stember Cohn & Davidson-Welling, we can help you assess whether the severance agreement you’ve been offered is fair, valid, and enforceable — before you sign it. We also represent employees in litigation who have been accused of breaching severance agreements, and in cases where their employers have not upheld the promises they made under the contract.
Facing termination, a layoff, or resignation can be stressful and overwhelming. At Stember Cohn & Davidson-Welling LLC, we skillfully represent individuals who are separating from employment — either voluntarily or due to termination. Located in Pittsburgh, we handle a broad scope of employment matters for clients in Pittsburgh and throughout Western Pennsylvania, including reviewing and negotiating severance agreements. Call (412) 338-1445 or contact us to schedule a no-fee, initial conversation to learn how our severance agreement attorneys can assist you.