What is a Severance Agreement?
A severance agreement is a legally binding document between an employer and an employee that outlines the terms and conditions under which the employment relationship will be terminated. They are not generally required in Ohio or Kentucky. It is typically provided to employees when they are being laid off, either due to workforce restructuring, job elimination, or other reasons. The primary purpose of a severance agreement is to define the rights and responsibilities of both parties post-employment.
Key components of a severance agreement may include:
- Severance Package: Details about the compensation, such as a lump sum payment, continuation of salary, or other benefits, that the employee will receive upon termination.
- Release of Claims: A provision requiring the employee to waive their right to bring legal claims against the employer in exchange for the severance package.
- Confidentiality: Agreements to keep certain information confidential, including details about the termination and the terms of the severance package.
- Non-disparagement: A clause prohibiting the employee from making negative or disparaging remarks about the employer.
- Return of Company Property: Instructions for returning any company property, confidential information, or documents in the employee’s possession.
Five Common Issues to Consider Before You Sign a Severance Agreement:
Before you sign a severance agreement, you should ensure the legally binding contract protects your interests. Employers almost always draft the severance agreement to protect their interests, not yours. Below are a few examples of issues to consider before signing a severance agreement:
- Watch for non-competition clauses: Employers like to sneak non-competition clauses into Severance Agreements. If not carefully reviewed, you could be agreeing to not compete with your former employer for a lengthy amount of time after your employment ends.
- You are likely waving all rights to sue: If you sign a severance agreement, you are likely waiving ALL rights to bring any legal action against your former employer. This includes potential wrongful discharge claims and wage claims. If you think you have a claim against your former employer, contact an attorney before you sign the severance agreement.
- Be careful when asking for more: It is understandable to want more out of your severance agreement. However, be careful if you decide to make a counteroffer to your employer. If you ask for more, the employer could revoke the severance agreement leaving you nothing.
- Ensure your unemployment benefits are protected: Even with a signed severance agreement, employers can challenge the employee’s unemployment benefits by claiming the employee was terminated “for cause.” Before signing a severance agreement, you should know if your rights to collect unemployment benefits are protected.
- Act quickly: Federal law requires employers to provide certain employees (not all) 21 days to review the severance agreement and to accept its terms. However, don’t wait. Immediately review the document and discuss your options with an experienced attorney. If you do not act quickly, you could lose all rights to the terms of the severance agreement.
All severance agreements are different. You could be giving up substantial rights you have not considered. Before signing the agreement, it is very important to review the agreement with an experienced employment lawyer. Thompson Legal LLC charges a flat rate of $350 to review severance agreements.
What is a Non-Compete Agreement?
A non-compete agreement is a legal contract in which an employee agrees not to engage in competitive activities that may harm the employer’s business interests for a specified period and within a defined geographical area after leaving the company. These agreements are intended to protect a company’s trade secrets, confidential information, and client relationships.
Key elements of a non-compete agreement may include:
-
Scope of Restriction: Clearly defines the specific activities or industries the employee is prohibited from entering.
-
Duration: Specifies the length of time the non-compete restriction will be in effect.
-
Geographical Limitations: Defines the geographic area where the employee is restricted from competing with the employer.
-
Consideration: Often, the agreement includes some form of consideration, such as additional compensation or specialized training, in exchange for the employee’s commitment to the non-compete terms.
Every state has different laws regarding the enforceability of non-competition contracts. Courts often apply a balancing test when determining if a non-competition contract is reasonable. Courts look to:
- whether the employer is seeking to protect a legitimate interest through the employment restraint,
- weather the restraint is a reasonable duration;
- whether the employment restrain is reasonable in terms of geography;
- whether the employment restraint is supported by adequate consideration.
Flat Rate Severance or Non-Compete Review
We offer a streamlined and efficient process for reviewing Kentucky and Ohio severance agreements or non-compete agreements. Clients can take advantage of a straightforward three-step procedure:
-
Pay Flat Rate Fee of $350: Begin by securing our services with a transparent flat-rate fee of $350. This upfront payment covers the entire review process, providing clients with cost certainty and peace of mind.
-
Send Agreement: After payment, clients can securely submit their severance agreement or non-compete clause for thorough evaluation.
-
Consultation with Attorney: Following the review, clients will have the opportunity to schedule a consultation with an attorney. During this session, clients can seek clarification on any aspects of the agreement, discuss potential negotiation points, and receive personalized legal advice tailored to their specific situation.
With our seamless three-step process, we aim to empower individuals facing severance or non-compete challenges, ensuring they are well-informed and equipped to make sound decisions regarding their professional future.
If your employer presents you with a non-competition or severance agreement it is wise to have an experienced attorney review the document and tell you in “normal people language” what the risks are regarding the contract. We offer an affordable review for a flat rate of $350.
Call or text us today at 502-366-2121 for a free consultation if you have any Kentucky or Ohio employment issues.