Company severance agreement - do I really need to talk to a lawyer?

[deek]

Not too long ago I posted here about accepting my severance offer (voluntary exit) from my employer. Got the agreement in the mail today and they recommend talking to a lawyer to go over everything. Is that actually necessary or is that just something employers say to cover their butts? Is there any specific section I should be reading? The severance offer and how it's distributed is pretty clear to me.

[sayonara]

In my experience (I reviewed and transacted on lots of legal agreements working many years in commercial real estate development; I also had a business with about 15 employees), that's just something the company will say as a CYA. Based on your post, it sounds like you understand everything that's in there and there is a clear detail of how you're going to get paid out. Is there any specific language in agreement that you're concerned about?

As long as there's clear detail regarding timing and method of payment and no action required on your part to receive it (other than signing), I wouldn't be too worried about it. Sometimes they'll try to get you to sign away any future claims against them, etc. etc., which isn't ideal, but it doesn't sound like you have any plan to go after them for their employment practices, so that doesn't sound like an issue in your case.

[Sandi_k]

I know someone in the financial services industry, and the severance agreements are An Issue.

Common gotchas:

- No contact: you brought clients with you on hire? They now "own" the; any contact, even if your FB friends, could be a violation of the "no contact/poaching" clause.

- Non-compete. If you have a specialization, does it preclude you from employment in that specialization?

- IP: Anything you knew or did might be construed as protected IP. The friend I mentioned got sued by his former brokerage, alleging that knowing about specific retirement planning strategies (think Roth conversions, SPIAs, tax optimization) was "using protected IP" since he'd done some training on those issues while at that firm. Crazy that general knowledge could be alleged as owned by a former employer.

- No comment clauses. You can't talk about how/why you left.

- Reputational clauses: you can't talk about the company or its leadership, to friends or on social media.

And I'm sure there are more. If it had anything to do with "clients as assets" or "no contact" with clients, I'd have my attorney review it.

[BlueHouse]

It sounds as if the exit is mutual, so you're on good terms.  If that's the case, I would expect that there should be NO RESTRICTIONS on anything you do in the future.  If there are any restrictions on YOUR future behavior, then you have to ask yourself why and are those restrictions reasonable? 

You don't owe them anything, so you don't have to sign an NDA at this point.  If they do want an NDA, limit it to just the terms of the severance, or something narrower than "everything". 

And as with all contracts, it's just an agreement.  They don't get to set all the terms.  You have a say in them too - so you should be as happy as they are with the terms.

[GilesMM]

Worst case the agreement limits your future choice of jobs or ability to join in a class action lawsuit based on things which happened at this job. An attorney experienced in these matters could advise you better on the specific agreement and your situation. Just because you understand the language in the document doesn’t mean you have the expertise to know all the potential ramifications.


In most cases, the agreement is not negotiable. You either sign or don’t sign.

[vand]

Dunno how it works in the US but here if you being made redundant it still has to go through due process where the law says it must be fair and transparent and you have to right to consultation, of which providing impartial legal advice is often a part of. 
Part of the deal is the commitment on your part that you accept the terms of the package and make no claims against the company.
It really is very rare that it's to limit you going to a potential competitor in the future - companies just want to cover their own backs against unfair dismissal claims at a later date.

[Siebrie]

Maybe they are willing to pay your lawyer? At some point in my career my employer and I decided to part ways, and we agreed that they would pay for my lawyer upto €1,000. I think the bill came to €500.
They had no say in which lawyer I hired.

[former player]

Apart from what's in the agreement it might be a good idea for you to think about what's not in the agreement,  by which I mean is there anything in the contract of employment that you signed, or anything else that you agreed to during your employment, that you want to stop happening but would continue if not expressly stopped?

The other thing to think about is putting time limits on anything in the severance agreement - time within which the severance must be paid, end date to anything restrictive in it.

[Catbert]

I'm guessing that it's general CYA "advice".  Sandi K and others mentioned some potential gotch yas.  Since you're leaving on good terms and it really is voluntary I'd skip the lawyer unless it had limits on client/non-compete that I might run afoul of.   

[kite]

Free opinions on the internet are worth what you are paying for them.

Everything that "seems clear" may have an impact on your future that you don't intend. Only you reading it and/or a lawyer interpreting it for you can tell. 
That said, I've not had a lawyer review mine.  It is standard language.  I'm not returning to work in the same industry, so non-compete constraints don't impact me. 

[BlueHouse]

I'm not returning to work in the same industry, so non-compete constraints don't impact me.

@former player       's comment about adding a time limit on restrictions is great advice.  While you think you'll never return to this industry, why allow a restriction?   Adding a limit of 3 years seems to be a nice safe option. 

[Chris Pascale]

Friend of mine asked for a severance to leave a hedge fund. They made him an offer he thought was good, and took about 2 months off before starting another job.

He was happy. They were happy.

In his opinion, he had nothing to lose, because they were making him miserable, and firing people without severance.