Is Your Severance Offer Mandatory Under a Contract or Policy?
|Were You Promised Severance?|
Some people, usually executives or highly sought after salespersons, have employment agreements requiring the payment of severance if they are terminated without good cause.
Others, such as employees working for large corporations, may be entitled to severance under the
company's defined plan (often governed by ERISA).
Union employees often get severance pursuant to the terms of a Collective Bargaining Agreement.
If you are one of these types of employees, your severance is NOT being offered voluntarily. Rather, your employer is required by law or contract to offer you severance. In such situations, you want to make sure that the terms of the severance offer are consistent with (and not more stringent than) the terms of your contract, the company's ERISA plan or the CBA.
One thing to look for: does the severance package require you to sign a non-compete agreement?
Is my Severance Offer Non-mandatory?
|Is This the Best Choice?|
is, the company is not required to offer you severance but is doing so anyway. Why would it do that? Is your employer being nice? Afraid of a lawsuit? Simply following the company's usual practice?
Whatever the reason(s), if you receive a non-mandatory severance offer, you should be mindful of Release language and/or non-competition restrictions contained therein.
Ask yourself: is what I am getting worth what I am giving up? Seek counsel if this question is troubling.
John A. Gallagher is an employment lawyer who represents employees in Pennsylvania.
Click Here if you have questions about any aspect of employment law, from wrongful termination to wage and overtime claims, from discrimination and retaliation laws to Family and Medical Leave, from worker misclassification issues to non-compete agreements…
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