Employment | Severance Agreements

The Personal Injury & Employment Law Center

Severance Packages

 

You have just been notified that your job is being terminated but the company is offering you a separation or severance agreement. While the news of being terminated is typically very disappointing, you generally should welcome the offer of a separation agreement or severance package. Why? Because unless you have an employment contract with your employer that says otherwise, or unless it is a mass lay off, in Virginia you are generally an employee at will. That means that the employer typically does not owe you anything and can terminate you for any reason at any time without any further compensation. That means the employer owes you nothing more even if you were terminated for no good reason (called “without cause”).

If you are given a separation agreement, here are some basic things to know:

 

The Standard Contents of a Severance Package

Severance packages are usually a good way for employers to assure themselves of certain protections and guarantee a clean separation from employment. A severance package typically includes the following terms:

  • A general release of liability by you the employee (that means a promise by you not to make any claims against the employer or not to file a lawsuit against the employer for any reason or not to recruit anyone else to make a claim or lawsuit);
  • A confidentiality provision that requires you to be quiet about the terms of your severance – especially the amount of compensation or the benefits that you are receiving;
  • A requirement that you return any and all company property and that you keep any proprietary confidential information (like company finances or customer lists) secret;
  • A promise by you, the employee, not to say negative things or speak poorly about the employer after leaving (usually referred to as a “non-disparagement clause”);
  • In some cases, you may be asked to not take a job where you are in competition with the company (this is called a “non-compete”) for one to two years and/or you may be asked not to try to hire any of the company’s employees or try to take away any of the company’s customers or clients (called “non-solicitation provisions”);
  • Sometimes you might have to agree not to seek any future employment with that employer; and,
  • If you are age 40 or over, then the agreement will tell you that you have the right to consult with an attorney plus have 21 days to consider the agreement and 7 days after signing to revoke it. These terms are required in order for you to properly release any age discrimination claim.

In exchange for agreeing to terms like those listed above, you the employee generally might receive in exchange:

  • Compensation – either in the form of a lump sum amount or as front pay for a set period of time following the termination of employment;
  • Some extension for a period of time of other benefits such as health insurance and life/disability insurance;
  • Clarification as to how you and the employer will say the employment ended (such as a “mutual separation” or a “lay off” or a “company restructuring” or a “voluntary resignation”) and also clarification on exactly what information the Company will give out when asked for a reference by your future prospective employers; and,
  • A promise by the employer not to say negative things or speak poorly about you the employee (if it goes both ways, it called a “mutual non-disparagement clause”).

 

 What do I need to look out for?

  • If you are getting paid a lump-sum settlement – it often will say subject to the necessary tax withholding. Watch out! Unless you specify a different withholding rate – you will have taxes taken out as if you were making that lump sum amount every pay period of the year – meaning a large chunk of money towards taxes (larger then necessary or warranted) will unexpectedly come out of that lump sum payment.
  • Be careful about waiving your right to claim or seek to claim unemployment – unless you are getting paid future payments for a period of time (during which time you would not be eligible for unemployment), the employer cannot make you waive this claim.
  • If it is a mass lay-off then other rules apply under the WARN act – too detailed to discuss here.
  • If you know that other employees who previously were terminated or also being terminated received or are receiving a lot more money in severance than you – see below on trying to negotiate.

 

 Can or should I negotiate?

Whether you have any room to negotiate depends on a variety of factors:

  • If the employer has paid the exact same amount in severance over time (for example one or two weeks for every year of employment), you typically will have little room to negotiate because the employer wants to (and should) be consistent with all employees.
  • If you are being terminated or laid off for what may be an illegal or discriminatory reason, then you may have some leverage to negotiate a better pay out since you could be releasing claims that have some value. In such an event you definitely want to consult with an attorney to find out if you have any valid leverage to negotiate a better deal.
  • If there are terms in the severance agreement that you are offered that are simply unfair, then you should try to negotiate the removal of those terms.
  • If the severance agreement is silent on how you and the employer are going to mutually characterize the separation or what references the employer plans to give out, then you should negotiate those items.
  • Other items that might be negotiable include:
    • a continuation of health benefits for a short period of time, and
    • possibly a letter of recommendation (especially if your termination is not due to poor performance).

Before you sign a severance agreement, do your best to understand the terms and ensure that you are being offered fair and reasonable severance. If there is a non-compete provision, you may want to seek legal counsel to ensure it is not overly broad and does not overly restrict you in your search for new employment. A general release can sometimes be overly broad and may severely limit your ability to bring a lawsuit for a legitimate legal claim against another company simply because they are somehow affiliated with your employer. A confidentiality provision may be so strict it hinders your ability to get financial advice from your accountant or tax attorney. In addition, the severance agreement may contain terms that are simply not enforceable.  You should make sure you know what rights cannot be waived, regardless of what the severance contract says.
A qualified Virginia employment lawyer can help you navigate the terms of the severance agreement and identify any areas of concern or whether negotiation of new terms is reasonable. At Locke and Quinn, principal Colleen Quinn has thirty years of experience helping employees negotiate severance packages. Please contact our office with any further inquiries about these services.

I worked with Richard Locke over the past year and a half. During that time, he provided me with counsel that was intelligent, balanced and trustworthy. He was respectful of the difficulty of the situation, and provided an educated and thoughtful approach to the process. Rather than focus on the drama and minutiae of the case, Richard was driven to provide favorable legal results in the most positive way possible. In many ways, his demeanor helped to keep me focused and calm throughout the process. He combines a superior knowledge of the law with a wealth of experience inside and outside of the courtroom. This knowledge and experience was incredibly valuable as my case progressed to help steer its direction and my decisions. His office staff is very responsive, and a pleasure to work with as well.read more
Amy Johnson
Amy Johnson
18:39 18 May 18
My wife and I adopted a babygirl in 2015. A friend of mine, whose daughter is lawyer, recommended Colleen Quinn. We went for our initial consultation and we could tell immediately that Colleen was very knowledgeable and professional. She went into detail and gave us the costs associated with the adoption as well as every single step in the process. Colleen is very welcoming and easy to talk to. We cannot leave this review without mentioning our primary contact, Colleen's paralegal, CharSalle Charles (Charli). Without Charli, I don't think we would have made it through the adoption. Charli was there anytime we called to answer our questions and to provide support for us. Charli even came to the hospital the day after our daughter was born, to handle all the paperwork between us and the birth mother. We truly thank Locke and Quinn and especially Charli for their hard work and support. Our adoption was even finalized a month in advance of the initial date set forth. We highly recommend Locke and Quinn to any looking to adopt!!!read more
Tierre Christmas
Tierre Christmas
17:23 09 Feb 16
After doing quite a bit of research on the adoption process, we decided to set up an initial consultation with Colleen, and we found that first session very beneficial and informative. There were many things that impressed us about Colleen from the very beginning: her level of expertise and reputation as an adoption attorney, the accolades she's received throughout her career, her friendly and personable nature, and her willingness to provide us with comprehensive information about the adoption process including projected fees. We also wanted to make sure that we were being well represented and advocated for, and quickly knew that Colleen would not only guide us through the adoption process, but advocate for us as well. Colleen is both passionate about what she does and compassionate toward all parties involved in the adoption process.Colleen’s paralegal, CharSalle (Charli) is an absolute treasure! Charli was readily available to answer questions by phone or by email. She would reach out to us if there was a birth mother interested in speaking or meeting with us after reviewing our profile. We were matched with a birth mother in November 2014, and our daughter was born in February 2015. Colleen and Charli guided us through the initial meetings with the birth parents, the open adoption agreements, and they stayed in touch with us by phone and email when our daughter was born. Our adoption was finalized in six months, and we couldn’t be more pleased with the level of communication we received, and continue to receive, from Colleen and Charli as well as the level of expertise and true passion they have for guiding families through the adoption process. We highly recommend Colleen, Charli, and the staff at Locke & Quinn to anyone considering adoption!!!!read more
Joe Ana
Joe Ana
16:35 15 Feb 16
kathleen cossaboon
kathleen cossaboon
01:35 31 May 18
Sharon Robertson Dewitt
Sharon Robertson Dewitt
19:20 23 Aug 17
My husband and I just recently finalized the adoption of our son thanks to Colleen! Our situation happened FAST, and Colleen never missed a beat. Colleen, Katie and Charli were all quick to answer any questions we had and made us feel confident in their ability to provide the services needed. We were blown away at the knowledge and organization Colleen had throughout this process as well! We intend to continue to grow our family through adoption again, and will be using Locke & Quinn!
Ashley Halsey
Ashley Halsey
2019-02-10T03:58:33+0000
My wife and I worked with Colleen Quinn and her paralegal Charli (CharSalle) on my daughter's international re-adoption. We are in Fairfax, VA and they were happy to work with us even though we weren’t local to them. Everything was done by email and mail. They answered all of our questions in a timely manner and were very knowledgeable about the process. We worked almost entirely with Charli after the initial emails and phone calls and she was great to work with. They filed all of our paperwork with our court, everything went smoothly, and we received our Final Order. Charli has always kept us in the loop about the process and sent us updates. We mailed original documents back and forth without any issue. Their legal fee was very competitive and better than most attorneys in our own area. We are very pleased with their work and assistance in getting our adoption finalized. I wouldn’t hesitate to recommend them to anyone. Thank you!
Ahmed Rashid
Ahmed Rashid
2018-12-20T14:52:57+0000
Great experience!! Everything I needed they took care of with a timely fashion! Highly recommend!
Morgan Williams Seay
Morgan Williams Seay
2018-08-21T00:14:11+0000
Bob Stiepock
Bob Stiepock
2017-10-23T19:39:04+0000
Personal Injury is a challenging event on many levels in ones life. Have you experienced a moment where you were injured and need to seek legal advice? You need to make a call to Colleen Quinn today. I began to research different law firms that handled Personal Injury. I interviewed several attorneys and spoke with large practices to small firms. I was impressed by Colleens resume and her work with women and the law. I will never regret hiring Colleen and her TEAM. The word TEAM is exactly what I received through out my case. My case was attacked with professionalism and the team was always in communication with me. When I would call to ask questions or to get a better explanation I was always made to feel as if I was the only client. As my case arrived closer to the trail date, my TEAM went into full 110%+ effort and preparation. Colleen was ALWAYS seeking to settle my case with the best outcome that she could. YOU WILL NOT FIND A MORE UPFRONT, HONEST, HARDWORKING-GET IT DONE ATTITUDE THAN THE TEAM OF COLLEEN M. QUINN!! MAKE THAT CALL TODAY-YOU WONT REGET IT!!
Lisa Moore Walker
Lisa Moore Walker
2017-09-17T03:54:10+0000
Cathy Tyree Herb
Cathy Tyree Herb
2013-07-30T17:33:44+0000
RICHMOND: 804-285-6253
CONTACT US

Severance Agreements


Severance Packages

 

You have just been notified that your job is being terminated but the company is offering you a separation or severance agreement. While the news of being terminated is typically very disappointing, you generally should welcome the offer of a separation agreement or severance package. Why? Because unless you have an employment contract with your employer that says otherwise, or unless it is a mass lay off, in Virginia you are generally an employee at will. That means that the employer typically does not owe you anything and can terminate you for any reason at any time without any further compensation. That means the employer owes you nothing more even if you were terminated for no good reason (called “without cause”).

If you are given a separation agreement, here are some basic things to know:

 

The Standard Contents of a Severance Package

Severance packages are usually a good way for employers to assure themselves of certain protections and guarantee a clean separation from employment. A severance package typically includes the following terms:

  • A general release of liability by you the employee (that means a promise by you not to make any claims against the employer or not to file a lawsuit against the employer for any reason or not to recruit anyone else to make a claim or lawsuit);
  • A confidentiality provision that requires you to be quiet about the terms of your severance – especially the amount of compensation or the benefits that you are receiving;
  • A requirement that you return any and all company property and that you keep any proprietary confidential information (like company finances or customer lists) secret;
  • A promise by you, the employee, not to say negative things or speak poorly about the employer after leaving (usually referred to as a “non-disparagement clause”);
  • In some cases, you may be asked to not take a job where you are in competition with the company (this is called a “non-compete”) for one to two years and/or you may be asked not to try to hire any of the company’s employees or try to take away any of the company’s customers or clients (called “non-solicitation provisions”);
  • Sometimes you might have to agree not to seek any future employment with that employer; and,
  • If you are age 40 or over, then the agreement will tell you that you have the right to consult with an attorney plus have 21 days to consider the agreement and 7 days after signing to revoke it. These terms are required in order for you to properly release any age discrimination claim.

In exchange for agreeing to terms like those listed above, you the employee generally might receive in exchange:

  • Compensation – either in the form of a lump sum amount or as front pay for a set period of time following the termination of employment;
  • Some extension for a period of time of other benefits such as health insurance and life/disability insurance;
  • Clarification as to how you and the employer will say the employment ended (such as a “mutual separation” or a “lay off” or a “company restructuring” or a “voluntary resignation”) and also clarification on exactly what information the Company will give out when asked for a reference by your future prospective employers; and,
  • A promise by the employer not to say negative things or speak poorly about you the employee (if it goes both ways, it called a “mutual non-disparagement clause”).

 

 What do I need to look out for?

  • If you are getting paid a lump-sum settlement – it often will say subject to the necessary tax withholding. Watch out! Unless you specify a different withholding rate – you will have taxes taken out as if you were making that lump sum amount every pay period of the year – meaning a large chunk of money towards taxes (larger then necessary or warranted) will unexpectedly come out of that lump sum payment.
  • Be careful about waiving your right to claim or seek to claim unemployment – unless you are getting paid future payments for a period of time (during which time you would not be eligible for unemployment), the employer cannot make you waive this claim.
  • If it is a mass lay-off then other rules apply under the WARN act – too detailed to discuss here.
  • If you know that other employees who previously were terminated or also being terminated received or are receiving a lot more money in severance than you – see below on trying to negotiate.

 

 Can or should I negotiate?

Whether you have any room to negotiate depends on a variety of factors:

  • If the employer has paid the exact same amount in severance over time (for example one or two weeks for every year of employment), you typically will have little room to negotiate because the employer wants to (and should) be consistent with all employees.
  • If you are being terminated or laid off for what may be an illegal or discriminatory reason, then you may have some leverage to negotiate a better pay out since you could be releasing claims that have some value. In such an event you definitely want to consult with an attorney to find out if you have any valid leverage to negotiate a better deal.
  • If there are terms in the severance agreement that you are offered that are simply unfair, then you should try to negotiate the removal of those terms.
  • If the severance agreement is silent on how you and the employer are going to mutually characterize the separation or what references the employer plans to give out, then you should negotiate those items.
  • Other items that might be negotiable include:
    • a continuation of health benefits for a short period of time, and
    • possibly a letter of recommendation (especially if your termination is not due to poor performance).

Before you sign a severance agreement, do your best to understand the terms and ensure that you are being offered fair and reasonable severance. If there is a non-compete provision, you may want to seek legal counsel to ensure it is not overly broad and does not overly restrict you in your search for new employment. A general release can sometimes be overly broad and may severely limit your ability to bring a lawsuit for a legitimate legal claim against another company simply because they are somehow affiliated with your employer. A confidentiality provision may be so strict it hinders your ability to get financial advice from your accountant or tax attorney. In addition, the severance agreement may contain terms that are simply not enforceable.  You should make sure you know what rights cannot be waived, regardless of what the severance contract says.
A qualified Virginia employment lawyer can help you navigate the terms of the severance agreement and identify any areas of concern or whether negotiation of new terms is reasonable. At Locke and Quinn, principal Colleen Quinn has thirty years of experience helping employees negotiate severance packages. Please contact our office with any further inquiries about these services.

I worked with Richard Locke over the past year and a half. During that time, he provided me with counsel that was intelligent, balanced and trustworthy. He was respectful of the difficulty of the situation, and provided an educated and thoughtful approach to the process. Rather than focus on the drama and minutiae of the case, Richard was driven to provide favorable legal results in the most positive way possible. In many ways, his demeanor helped to keep me focused and calm throughout the process. He combines a superior knowledge of the law with a wealth of experience inside and outside of the courtroom. This knowledge and experience was incredibly valuable as my case progressed to help steer its direction and my decisions. His office staff is very responsive, and a pleasure to work with as well.read more
Amy Johnson
Amy Johnson
18:39 18 May 18
My wife and I adopted a babygirl in 2015. A friend of mine, whose daughter is lawyer, recommended Colleen Quinn. We went for our initial consultation and we could tell immediately that Colleen was very knowledgeable and professional. She went into detail and gave us the costs associated with the adoption as well as every single step in the process. Colleen is very welcoming and easy to talk to. We cannot leave this review without mentioning our primary contact, Colleen's paralegal, CharSalle Charles (Charli). Without Charli, I don't think we would have made it through the adoption. Charli was there anytime we called to answer our questions and to provide support for us. Charli even came to the hospital the day after our daughter was born, to handle all the paperwork between us and the birth mother. We truly thank Locke and Quinn and especially Charli for their hard work and support. Our adoption was even finalized a month in advance of the initial date set forth. We highly recommend Locke and Quinn to any looking to adopt!!!read more
Tierre Christmas
Tierre Christmas
17:23 09 Feb 16
After doing quite a bit of research on the adoption process, we decided to set up an initial consultation with Colleen, and we found that first session very beneficial and informative. There were many things that impressed us about Colleen from the very beginning: her level of expertise and reputation as an adoption attorney, the accolades she's received throughout her career, her friendly and personable nature, and her willingness to provide us with comprehensive information about the adoption process including projected fees. We also wanted to make sure that we were being well represented and advocated for, and quickly knew that Colleen would not only guide us through the adoption process, but advocate for us as well. Colleen is both passionate about what she does and compassionate toward all parties involved in the adoption process.Colleen’s paralegal, CharSalle (Charli) is an absolute treasure! Charli was readily available to answer questions by phone or by email. She would reach out to us if there was a birth mother interested in speaking or meeting with us after reviewing our profile. We were matched with a birth mother in November 2014, and our daughter was born in February 2015. Colleen and Charli guided us through the initial meetings with the birth parents, the open adoption agreements, and they stayed in touch with us by phone and email when our daughter was born. Our adoption was finalized in six months, and we couldn’t be more pleased with the level of communication we received, and continue to receive, from Colleen and Charli as well as the level of expertise and true passion they have for guiding families through the adoption process. We highly recommend Colleen, Charli, and the staff at Locke & Quinn to anyone considering adoption!!!!read more
Joe Ana
Joe Ana
16:35 15 Feb 16
kathleen cossaboon
kathleen cossaboon
01:35 31 May 18
Sharon Robertson Dewitt
Sharon Robertson Dewitt
19:20 23 Aug 17
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