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Jake Modla Law, PLLC
From offices in Charlotte and Rock Hill Serving throughout North Carolina and South Carolina

Severance agreements must be handled properly

A severance agreement is an important bargaining tool for many businesses. Anyone who is being offered one or who has to negotiate on behalf of a business must ensure they understand exactly what everything regarding these agreements mean.

There are several things that you should consider when you are in this position.

Severance agreements are binding

Some severance agreements are included in an employment contract. These are binding agreements that both sides of the contract must abide by if the person's employment is terminated. There are sometimes exclusions in these agreements, such as if the employee is caught embezzling the company's assets. In these cases, the company wouldn't be responsible for abiding by the agreement as long as that exclusion is present.

There are also severance agreements that might come up as a result of the company needing to let good employees go. Sometimes, these are offered by companies that are closing their doors. Discussing the terms of the agreement during this type of situation can be difficult because it is often stressful for both sides.

Agreements must be properly executed

In order to protect the business and the employee, these agreements must be worded correctly and must not leave out any important details. Agreements that are considered vague might not be found enforceable. This could be devastating to the employee, but it could also be dangerous for the business.

Another consideration for these agreements is that the wording can't be overly complicated. If they are filled with legal jargon and complex wording that the average person can't understand, there is a chance that it will be thrown out.

When an agreement is found to be unenforceable, the worker won't be able to get the benefits due as part of the agreement. The company wouldn't be able to count on having the non-compete or non-disclosure clauses enforced when the person leaves the company.

It is imperative that anyone who is involved in a severance agreement has time to have it reviewed. Rushing someone to sign can also invalidate the agreement if there is ever a question over its enforceability.

Employees who sign severance agreements and then learn that the employer isn't going to abide by it can take legal action. This might take time and effort, but it is usually worth it.

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