“There is no real risk” of not having a separation agreement, said Lisa Hird Chung, an employment law associate at Duane Morris` San Diego office. Earlier this year, a federal court in Pennsylvania issued a statement (here) in which an employee of the plaintiff stated that she was so stressed when she signed a severance agreement that her signature on the document did not reflect a “scientific and voluntary” waiver of rights against the defendant employer. There are four easy steps to follow in implementing the agreement. If you follow these measures, make sure you cover all your bases, and leave nothing to chance: while organizations are not legally obligated to offer a separation agreement – and are generally subject to a low legal risk if they don`t, lawyers say – most clients advise their clients to put one on the table , if only to ensure calm in the face of possible future disputes. Workers should have at least 21 days to review the compensation agreement. Make sure that you advise the employee to have the severance agreement and general release verified by a lawyer. Thomas D. Rees, a labour law practice partner at High Swartz LLP in Norristown, Pa., however, believes that separation agreements are “highly desirable” when an employee is dismissed for some reason that is not a major fault. “A separation agreement is absolutely necessary if the employer wants all rights, including discriminatory ones, to be released,” he said. It is important to weigh the risks of non-disappearance clauses – in severance agreements and general guidelines – given Griffin`s position that the guidelines are supported by NLRB case decisions, advises lawyer Kristina Spitler of Vanderpool Frostick-Nishanian PC in Manassas, Va. and, at the end of the day, employers may have to change their policies.
Organizations that cross the border may face costly litigation. For example, in 2013, the agency won a pioneering case by arguing that Illinois bookseller Baker and Taylor had infringed on the right of employees to file a discrimination complaint with its “overly broad, misleading and unenforceable severance agreement.” This approach may at first seem like a time-saving approach, but it can lead to lengthy litigation, a risk that will only increase in the face of the current stream of legal challenges in general publications, sometimes referred to as waivers. Since the courts are removing what was common in the agreements a few years ago, employers should ensure that they do not use the same old severance agreements that no longer allow the courts. Layoffs and reductions of the existing Force (RIF) are common business practices, regardless of the economic climate in which we find ourselves, which means that your company needs a secure strategy to let people go, and the best practice to manage these moments is an iron severance agreement. About one-third of employers who have signed severance agreements pay a minimum of two weeks. 20% offer at least one month`s salary. Source: WorldatWork, Severance and Control Plans (2014). However, employers face a number of challenges in implementing a practical and enforceable agreement.
On the one hand, a staff member is not required to sign. On the other hand, the applicability of certain provisions often varies from state to state. Finally, and not least, government authorities are strengthening their control over separation agreements as they discover more and more cases of unenforceable conditions.