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Reasons to Reconsider Accepting a Severance Package From Your Employer


Upon termination, many employers offer their employees a severance package that includes severance pay and other benefits. A severance agreement, when properly executed, is a binding contract between employees and employers, created at the time an employee separates from that employer. However, in most cases, the employee is also required to relinquish certain rights in exchange for the severance pay or other benefits. There are a few situations in which employees should reconsider accepting the offered severance package, at least before having an employment attorney review it.

Severance Agreements are not Required by Law

Since Alabama is an employment-at-will state, meaning your employer does not need good cause to fire you, employers are not required to offer severance agreements unless bound by union agreements. However, if an employer chooses to do so, it can provide its employees with severance agreements in honor of their service to the company. Regardless of the positive nature of a severance agreement, it is still a binding agreement. As such, you must be careful to read and consider the language of the agreement before you sign.

Reasons to have an attorney review the severance package BEFORE you sign

If you are ever offered a severance agreement by your employer, you will typically be given an opportunity to review the agreement with your attorney. It is very important that you take that opportunity and consult with an employment law attorney before you sign the agreement to make sure you are not waiving any of your legal rights as an employee. Here are a few common reasons that you should consider before accepting a severance package.

• Do you believe you were terminated because of a protected characteristic, such as your race, gender, age, religious beliefs? If so, there is a strong possibility that the severance agreement will include provisions that require you to waive your right to file a discrimination claim.

• Were you on FMLA or pregnancy leave, or had you recently requested such leave, at the time you were terminated? Similarly, were you terminated after reporting illegal conduct occurring at the workplace or being engaged in by your employer? If so, you may be asked to waive your right to bring a retaliation or other employment claim.

• Might your employer have a reason to deter you from seeking employment with a competitor? In some industries, competition can be a significant issue. In those cases, your employer may include some type of non-compete agreement in the terms of the severance agreement.

Resist the Temptation to Quickly Accept the Severance Pay Regardless of the Terms

The unfortunate reality is that many employers use severance agreements as a guise for heading off potential lawsuits. The reason it works is that many employees who are facing the loss of income that accompanies termination feel pressured to accept several months of severance pay they are being offered. That pressure makes it difficult to carefully and objectively consider the terms of the agreement. Resist the apparent need to quickly accept the agreement. Instead, take the time you are given to review the agreement with your attorney.

If you feel you have been the victim of discrimination or retaliation in the workplace, or if you have any other questions regarding your employment rights, please contact the experienced employment law attorneys at Michel | King. You can contact us either online or by calling us at (205) 265-1880. We are here to serve you!

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