7 Mistakes to Avoid When Your Employer Offers a Severance Agreement

When leaving a job, signing a severance agreement can help ensure that you will receive the pay and benefits to which you are legally entitled. But signing a severance agreement can present risks as well. As a result, informed decision-making is essential, and we strongly recommend consulting with an experienced Washington DC severance agreement attorney who can walk you through everything you need to know.

 All-Too-Common Mistakes When Considering a Severance Agreement

If your employer has offered you a severance agreement, there are some potentially costly mistakes that you must be careful to avoid. While your attorney will be able to advise you based on your individual circumstances, some examples of all-too-common mistakes include:

1. Signing the Agreement Without Reading It

You should never sign an agreement without reading it first. While this applies across the board, it is especially important when your employer has offered you a severance agreement. Severance agreements are often heavily one-sided, and if you don’t know what you are signing, you could end up without the rights you were expecting—or with obligations that you were not expecting. As discussed below, employees can (and should) negotiate their severance agreements in many cases.

2. Signing the Agreement Despite Having Reservations or Concerns

If you have reservations or concerns after reading your severance agreement, you should not ignore them. Once you sign, you will be bound by the terms to which you have agreed. Agreeing to unfavorable terms could have a variety of negative consequences, and these consequences could impact your finances and your employment prospects for years to come.  

3. Overlooking Provisions that Restrict Your Future Work

Severance agreements commonly include provisions that restrict employees’ future work. The most common examples are confidentiality provisions, non-competition covenants, and non-solicitation covenants. While employers may have a legitimate interest in imposing these types of restrictions to an extent, it is not uncommon for employers to overreach. There are also circumstances in which no such restrictions will be warranted.

4. Overlooking Other Provisions that Protect Your Employer

In addition to the restrictions we just mentioned, severance agreements commonly include other provisions that protect employers. For example, employers routinely include provisions requiring employees to waive their right to pursue discrimination and other employment-related claims. If you have a claim against your employer, waiving your claim could prove very costly; and, in this scenario, it may be in your best interests to either pursue a settlement or take formal legal action.

5. Overlooking Provisions that Aren’t In the Agreement (But Should Be)

In addition to including provisions favorable to employers, severance agreements often exclude provisions favorable to employees. As a result, beyond understanding what is in your severance agreement, it is equally important to understand what is not in your severance agreement (but should be).

6. Assuming Your Severance Agreement is Non-Negotiable

Severance agreements are not non-negotiable. To the contrary, most employers know that their severance agreements are one-sided and, as a result, expect their employees to negotiate in most cases.

It may be necessary to negotiate the terms of your severance agreement for several reasons, including (but not limited to):

• Clarifying that you will receive the full compensation and benefits you are expecting
• Clarifying ownership of intellectual property (IP)
• Limiting the protections for your employer
• Adding in necessary terms that have been omitted
• Protecting your ability to enforce the agreement if necessary

Your Washington DC severance agreement attorney can help you understand what you should negotiate, and then your attorney can negotiate with your employer on your behalf. While negotiating can be intimidating, it is part of the process and important for protecting your interests in the long term.

7. Signing the Agreement Before You Talk to an Attorney

Given everything we’ve discussed, you should not sign your employer’s severance agreement before you speak with an attorney. In this scenario, hiring an experienced attorney is well worth it. Your attorney will be able to help ensure that you are making informed decisions—and that you are not unnecessarily leaving money on the table.

Discuss Your Next Steps with an Experienced Washington D.C. Severance Agreement Attorney

Did you receive a severance agreement from your employer? If so, we strongly encourage you to contact us so that we can help you make informed decisions about your next steps. To schedule a call with an experienced Washington DC severance agreement attorney, please call 410-514-6099 or tell us how we can reach you online today.