Severance Agreements Attorneys
Ohio is an at-will employment state, which means that most employees in Ohio do not work under an employment contract. People are free to accept employment and leave employment whenever they wish. Likewise, employers can fire employees for any reason, or for no reason at all, as long as the termination does not violate other employment laws. As a result, most employees who are terminated do not receive a severance package it and it is not required under Ohio law. However, some employers do offer severance pay for employees who are terminated or affected by a reduction in force, commonly referred to as “RIF”. Before signing a Severance or Separation Agreement, which is a binding contract, there are some things that employees need to know.
Common Provisions in Severance Agreements
Many times when people are offered severance agreements, sometimes referred to as separation or release of claims agreements, they have no idea what to expect. There are, however, some common provisions included within severance agreements, such as:
- Release of Claims/Waiving the right to sue: Most people who agree to the terms within a severance package waive their right to sue the employer, not only for the termination, but for any dispute arising out of their employment relationship. For the most part, after a severance agreement is signed an employee will not be able to sue the employer for any reason related to employment, even if the employer has violated the law.
- Confidentiality Clauses: The terms within a severance agreement are almost always confidential. This means the employee who has the agreement is not allowed to discuss the terms or the amount offered within it with anyone except a spouse, tax advisor, or attorney. Sometimes an employee is not permitted to acknowledge that a severance agreement even exists.
- Non-disparagement clauses: Employers do not want employees to leave and start bad-mouthing the company. As such, many severance agreements include non-disparagement clauses which prevent employees from saying negative things about the employer or its management team, posting unfavorable comments on social media, and going to the media regarding their prior employer.
- Non-compete clauses: These clauses prevent an employee from working for a competitor for a specific period of time and sometimes within a certain geographic area. This may protect the employer, but can sometimes be unfair to employees who need to earn a living. An employment lawyer can help determine whether a non-compete clause is reasonable and likely to be enforced by a court.
- Ineligible For Re-hire Clauses: Sometimes, employees leave, but may want to work for the company in the future. A clause indicating that the employee is not eligible for re-hire will prevent this from happening. It is crucial to have a lawyer review these clauses so that you fully understand what you are signing.
Although some of these clauses may seem unfair, they are usually not necessarily illegal. Employees should know what employers cannot include in severance agreements to ensure that the one they receive is legal.
Limitations on Severance Agreements
It is essential that employees know what employers are not allowed to include in severance agreements. The first is that employers are not allowed to ask employees to forfeit their right to any vested pension benefits protected by law. If employees have a legal right to these benefits, they must receive them in accordance with provisions in the Pension Plan.
Employers also cannot ask employees to waive their right to file a discrimination complaint with the U.S. Equal Employment Opportunity Commission or the Ohio Civil Rights Commission. Employers can, however, require within a severance agreement that employees waive the right to receive financial compensation if they file these complaints and the Agency awards a financial settlement to the employee.
Our Ohio Employment Lawyers can Review Your Severance Agreement
If you have been offered a severance agreement, it is important that you do not accept it until a Columbus employment lawyer has reviewed it. At Marshall Forman & Schlein, LLC, we understand the terms and provisions contained in settlement agreements. If an employer has potentially violated the law, depending on the circumstances, we may be able to use it as leverage to negotiate a better severance agreement.
Severance agreements are extremely time-sensitive, so you should call us right away if you would like the severance agreement reviewed and to determine if it may be possible to negotiate additional severance benefits.