Severance Agreements

Severance agreements are contracts frequently given to employees who have been terminated or laid-off by their former employers. Just because you are presented with a severance agreement does not mean you have to sign it or that you need to agree to its terms. It is important to understand the language of any severance agreement and its legal consequences before signing. Our attorneys at Baillon Thome Jozwiak & Wanta LLP are experienced in reviewing and negotiating severance agreements on behalf of current and former employees.

Can my employer force me to sign a severance agreement?

From your employer’s perspective, the primary purpose in offering a severance agreement is to get you to waive your legal rights. In other words, your employer is offering to preemptively settle legal claims that you have yet to pursue and may not even know you have. In fact, by offering a severance agreement, your employer may be indicating that they think you have legal claims against them. For these reasons, it is important that the severance agreement being offered is fair and reasonable under the facts and circumstances of your specific employment and termination.

Most importantly, you do not have to sign the agreement. You do not have to sign it the day they present it to you. It is always in your best interest to have your contract renewed by an experienced severance agreement attorney so that you can protect your future rights as an employee and your just compensation.

What is a non-compete clause?

Your severance agreement may contain terms that will restrict your ability to secure new employment in your field and in your geographic location for a specified amount of time. These provisions, known as non-compete clauses are disfavored by Minnesota courts, but can be enforced under specific conditions. Likewise, your severance agreement may contain terms that will dictate how and what you can say about your employment with your former employer.

For these reasons, you should seek legal counsel as soon as your employer presents you with a severance agreement. Your severance payment functions as an important bridge to your next employment. In our free initial consultation, the employment lawyers at Baillon Thome Jozwiak & Wanta LLP will conduct a detailed interview to understand your employment and termination.

Can I sue for discrimination after signing a termination agreement?

Do you feel you were a victim of discrimination, harassment, or retaliation but recently signed a termination or severance agreement? This state law may be relevant to protect your rights and legal claims.

The Minnesota Human Rights Act is a state law that protects employees against discrimination, harassment and retaliation. Often, a severance agreement will contain language that will prevent you from suing your former employer for discrimination (race, age, gender, nation origin, family status, disability, color, creed, religion, marital status, sexual orientation, status with regard to public assistance, and membership in a local commission), harassment, or retaliation if you oppose a discriminatory practice in your workplace.

Can I rescind a termination agreement?

Given that the number of charges filed with the Minnesota Department of Human Rights is increasing, it is important to understand your rights prior to release your right to sue for discrimination. However, if you already signed a severance agreement and believe you may have a claim for discrimination, harassment or retaliation, you have 15 days from the date you signed the agreement to change your mind, or rescind, the agreement.

Rescinding an agreement is extremely time sensitive, and you must be sure it is done correctly. Please see out immediate assistance from an attorney if you wish to rescind an agreement. If you have already signed a severance agreement and received payment, our attorneys can review the severance agreement to ensure that the severance agreement itself did not violate any of your legal rights. If you were not provided this rescission period, then you may still be able to pursue your claims.

What happens in a law firm free consultation?

Our attorneys are interested in getting to know you and protecting your rights. At your initial consultation, we will identify any potential claims for employment discrimination, hostile work environment, whistleblower retaliation, sexual harassment or other grounds for wrongful termination. We will also determine whether there are claims of breach of contract, promissory estoppel or other contract-based claims. After we have identified any potential legal claims, we will discuss whether the severance agreement should be accepted or whether it is advisable to either pursue negotiations with your employer or otherwise move forward with your employment claims.

Even if we do not identify any potential legal claims, it is important to fully understand the terms of the severance agreement. Our attorneys will provide a clear explanation of the terms of the severance agreement and how they will impact you into the future.

Do I need an attorney to review my severance agreement?

Yes, you should always have an attorney review your severance agreement. Keep in mind that severance agreements must be voluntarily agreed to with knowledge of the contractual terms in the agreement. Our attorneys have convinced Courts to overturned severance agreements that were excessively confusing. In voiding the severance agreement, the Court acknowledged that the severance agreements were provided to former employees at a difficult time and written in a manner that could not be comprehended by the average person.

Do I have additional job protections if I am over 40?

If you are over 40 years old, any severance agreement must fulfill a number of separate requirements to waive claims under the Age Discrimination in Employment Act (“ADEA”) or the agreement is void. These requirements are imposed by the Older Worker Benefit Protection Act (“OWBPA”) and require the agreement is written in a manner calculated to be understood by the employee, refers to the ADEA and OWBPA, does not waive future claims, includes compensation beyond what the employee is already entitled, advises the employee to consult an attorney, provides at least 21 days to consider and seven days to revoke the severance agreement.

During layoffs, employers also must provide terminated employees with a list of employees being terminated and employees being retained. Minnesota Courts have invalidated severance agreements that have inaccurately included employees on the wrong list, even if the number of inaccuracies were minimal.

Contact Our Minnesota Employment Lawyers to Discuss Your Rights
The employment lawyers at Baillon Thome Jozwiak & Wanta LLP have assisted countless employees in understanding and negotiating severance agreements. It is important to consult with an attorney if you are offered a severance agreement, already signed a severance agreement, or believe you should have been offered a severance agreement to understand your rights. With assurance they have been treated fairly, our clients put themselves in the best possible position to start the next stage of their career.

Contact us for a free initial consultation. With assurance they have been treated fairly, our clients have put themselves in the best possible position to start the next stage of their career.