Severance Agreements: Common Post-Employment Issues and How to Avoid Them

Signing a severance agreement can present a variety of risks for unsuspecting employees. When employees fail to take the necessary steps to protect themselves, it is not unusual for post-employment issues to arise—and what it takes to resolve these issues can vary widely depending on the specific circumstances involved. Keep reading to learn about seven common post-employment issues and how to avoid them from an experienced Washington D.C. severance agreement lawyer.

7 Common Issues Employees Face After Signing Severance Agreements

Employees can potentially face a variety of issues after signing a severance agreement with their employer. Some of these issues can arise shortly after an employee leaves their job, while others can arise months—or even years—down the line. Here are seven common examples:

1. Disputes Involving Post-Termination Compensation

If your severance agreement includes provisions for post-termination compensation, your employer should timely pay the full amount it owes. This is true whether your employer has agreed to make a single lump-sum payment or to make bi-weekly or monthly payments over a specified period of time.

From delayed payments to improper deductions, employees may face various issues with their post-termination compensation. If you have not received any compensation to which you are contractually entitled under your severance agreement, you should consult with a lawyer promptly.  

2. Disputes Involving Post-Termination Benefits

You should also consult with a lawyer promptly if your former employer has failed to provide any benefits to which you are contractually entitled. This includes payments for unused vacation time, health insurance coverage, retirement account contributions, and all other types of benefits. Unfortunately, these issues are common as well, and some unscrupulous employers may wait to see whether their former employees are willing to take legal action.

3. Aggressive Enforcement of Non-Competition and Non-Solicitation Covenants

Non-competition and non-solicitation covenants are common terms in severance agreements. While Washington D.C. limits employers’ ability to enforce non-competition covenants, they are enforceable in some cases, and non-solicitation covenants are generally enforceable as well.

Aggressive enforcement of non-competition and non-solicitation covenants can leave employees facing contentious disputes with their former employers. Regardless of whether employees have grounds to challenge their former employers’ enforcement efforts, securing a favorable resolution can be a stressful, time-consuming, and potentially resource-consuming process.

4. Aggressive Enforcement of Non-Disparagement Covenants

Non-disparagement covenants are also common terms in severance agreements. Here too, many companies will aggressively pursue enforcement, issuing cease-and-desist demands and filing lawsuits over everything from statements made to former coworkers to posts on social media. While companies can (and do) overreach when taking action against their former employees, former employees must also be extremely careful to avoid saying anything that could warrant legal action.

5. Disputes Involving Ownership of IP and Use of Work Product

Disputes involving ownership of intellectual property (IP) and use of work product can arise with or without a severance agreement in place. Here too, former employees must be extremely careful to ensure that they have a clear understanding of their legal rights and obligations. If a former employee impermissibly uses their former employer’s IP or work product post-termination, this can lead to a contentious and potentially high-risk dispute. At the same time, if an individual’s former employer wrongly claims ownership of IP or work product, the individual will need to make an informed and strategic decision about how best to proceed.

6. Inability to Obtain References or Confirm No-Fault Termination

When looking for work after losing a job, having strong references can be essential. It can also be essential to avoid any questions as to why your previous position was terminated. If your severance agreement does not address these issues, you could find yourself facing challenges that you could (and perhaps should) have avoided.

7. Discovering that You Gave Up Your Right to Sue

Why do employers offer severance agreements? While there are several possible answers, one of the most common reasons is that a typical severance agreement will include a waiver of the employee’s right to sue. If you have a claim against your employer and you unknowingly waive your right to sue, you could unexpectedly find yourself unable to seek the financial compensation you deserve.

How to Avoid These Issues (and Others) When Offered a Severance Agreement

If you haven’t yet signed a severance agreement, how can you avoid these issues (and others) once you sign? To protect yourself in the future, you should:

• Carefully review your severance agreement and write down a list of questions. Before you sign a severance agreement, it is critical to review the agreement in detail. As you review your severance agreement, you should write down any questions you have so that you can get the answers you need to make informed decisions.
• Learn more about what severance agreements can (and should) include. When reviewing a severance agreement, understanding what it says and what it doesn’t say is equally important. To learn about some of the key terms that severance agreements can (and should) include, you can read: Severance Agreements: What to Know Before You Sign.
• Seek advice from an experienced lawyer before you sign. Severance agreements are complex legal documents. As a result, it is important to seek advice from an experienced lawyer before you sign. Along with helping you understand what your agreement says and what important terms have been omitted, your lawyer can also negotiate with your employer on your behalf if warranted.

By taking these steps, employees can ensure that they are making informed decisions about signing (or not signing) their employers’ proposed severance agreements. If you have been offered a severance agreement, we strongly recommend consulting with an experienced Washington D.C. severance agreement lawyer before you make any decisions that could have long-term implications for your finances, your career, or your legal rights.

Speak with an Experienced Washington D.C. Severance Agreement Lawyer in Confidence

If you have questions about signing a severance agreement (or about a legal issue related to a severance agreement you have already signed), we encourage you to contact us for more information. To speak with an experienced Washington D.C. severance agreement lawyer in confidence, please call 410-514-6099 or contact us online today.