No one wants to be terminated from their job. It can put you in a tough spot, both emotionally and financially. If your employer offers you a severance agreement, you may think it’s a blessing in disguise. After all, at least you’re getting money on your way out the door. But is accepting it really in your best interest?
What is a severance agreement?
A severance agreement is a contract between you and your employer, offered by the employer once they’ve made the decision to let you go. Generally, the employer agrees to pay you a certain amount of money in exchange for your silence in a couple of key areas.
It’s important to understand that you typically have no right to severance pay and that the employer is under no obligation to pay you beyond what you’re owed for the work you’ve done. And just because the employer does offer a severance agreement, it doesn’t necessarily mean accepting it is a bad thing – it could just mean the employer is covering their bases.
What’s the danger of the agreement?
The key to whether accepting a severance agreement is in your best interest is knowing what you’re giving up. In the agreement, the employer is getting your contractual promise not to do or say certain things. If those promises hurt your long-term interests, you probably shouldn’t sign.
Generally, you’ll be promising not to sue your employer down the road. If you’ve been harassed or discriminated against, you could be giving up your right to hold the employer accountable and recover damages for the conduct.
It’s not always easy to tell, at first glance, whether accepting a severance agreement is the right thing to do. When in doubt, speak to a professional who is experienced in California employment law – they can help you understand how the agreement will affect you, so that you can make a smart decision.