Dealing with the severance agreement often takes a back burner to dealing with the immediate emotional and financial issues facing any employee who loses a job. This is completely understandable, but employees should be aware that they will typically have just 21 days to review the severance agreement. In some cases, the employee may have only a few days to review (this is allowed when the employee is under 40), and in some cases the employee will have more time (45 days), such as when releases are sought from multiple employees. In any case, it is best to get a review of the severance agreement earlier rather than later so that an attorney will have time to evaluate and assist if needed.
Employees will typically be waiving the majority, if not all, of their rights by signing the severance agreement. In some cases, unemployment compensation and workers' compensation claims will be carved out of the agreement. While most employees read and take seriously the severance agreement's advice to consult an attorney, on occasion, we talk with employees who for some reason believed that they could sign the severance agreement and still sue the employer for discrimination or other unfair termination. In most cases this will not be possible.
Employees who are fired or laid off should discuss their options with a reputable employment law attorney to explore whether the termination or layoff was due to unlawful factors, such as age, race, disability, gender, pregnancy, protected leave, or retaliation for complaining of discrimination or unlawful behavior on the part of their employer, among other unlawful reasons. If so, the attorney will likely have leverage to negotiate a greater severance amount for the employee. Even without discrimination or other legally protected activity, a skilled attorney may be able to get additional severance for an employee, especially if the employee was highly valued at his or her place of employment and if the powers-that-be felt badly about the separation.
In addition to having an attorney assist with negotiating the actual severance amount, it is wise to understand and negotiate the non-economic terms of the severance agreement. For instance, what happens if an employee accidentally tells someone about the severance? (In most cases, they will have to pay the severance amount back to the employer and may even be liable for the employer's attorney's fees in collecting.) Does the severance agreement contain an additional non-compete, and is that non-compete enforceable? What will the employer tell prospective employers about the separated employee and reason for separation? Will the employer agree not to contest unemployment benefits? Will the employer agree to waive enforcement of a prior-existing non-compete as part of the severance? In some cases these "non-economic" considerations have more actual economic impact than the severance amount itself.
I personally have never encountered a client who was sorry that they had an attorney assist them with negotiating a severance agreement. In a few rare cases the amount offered will be high enough that the employee will accept the offer without negotiating, but even in those cases (and probably especially in those cases, since more is at stake) it is wise to have an employment attorney review the severance agreement to ensure that all is in order. Many local attorneys can offer a severance review for a reasonable flat fee and can offer negotiations with the employer for a reasonable hourly rate and retainer. In some cases, where the facts are particularly egregious, the employment attorney may be able to take the case on contingency so that the employee does not have to pay out-of-pocket.