Understanding Severance Agreements

In many cases, upon termination of an executive's employment position an employer will offer a severance package. Usually this package or servance agreement is in exchange for a release of any and all claims that employee may have against the employer. Usually, the employers' attorney will prepare a draft of the agreement, then the agreement will be reviewed and discussed by the employee's attorney. The draft is typically one-sided, and in most cases does not represent the executive or the employee's best interest. It is a good tactical idea to preempt this issue by having your lawyer prepare the initial draft, or have your lawyer thoroughly review and edit the initial draft or the servance document. It is important to remember that by allowing the employer's lawyer to draft the document, you are in some cases ceding control over the timing and inter workings of the document and the best possible outcome from such a document. If you need our Law Firm on your side call us day or night at 800-862-1260. The initial consultation is free and in many cases we are only paid upon the completion of the case and out of any recovery, if any.

Our Law Firm can assist you in negotiating a severance package, a compensation plan and/or an employment contract. If you need our Law Firm on your side call us day or night at 800-862-1260. The initial consultation is free and in many cases we are only paid upon the completion of the case and out of any recovery, if any.

The initial severance package is typically one sided and does not represent your best interests. Before you sign any document that are created by your employer or his employment law attorney, you should have an experienced employment lawyer review your severance package to ensure that you are getting the best value. In most cases the terms of the agreement and the amount of your severance can be improved. If you need our Law Firm on your side call us day or night at 800-862-1260. The initial consultation is free and in many cases we are only paid upon the completion of the case and out of any recovery, if any.

Throughout many settlement processes, the executive/physician/employee and the employer have different interests in the process. While the executive is often eager to complete the agreement and reap the rewards, the employer is often interested in delaying the need to write a large check. An Employment Law Attorney, on your side, can build strong financial incentives into the settlement to encourage the employer to make payments on time, including a provision for high interest rates on the settlement proceeds beginning on a specified date, such as ten days after the broad terms of the agreement are in place. Another tactic is to require that the settlement proceeds be deposited into an interest-bearing escrow account held by the employer of the employer's counsel, with the interest going to the executive. This removes any incentive for the employer to delay writing the final settlement check. If you need our Law Firm on your side call us day or night at 800-862-1260. The initial consultation is free and in many cases we are only paid upon the completion of the case and out of any recovery, if any.

Often, an employer will unilaterally draft a severance agreement and present it to the executive for signature. The executive then has the option to accept the terms of the agreement or to negotiate a better offer. It is often beneficial for the executive to attempt to achieve an enhanced package. In depth negotiations with counsel can be costly, and often, an executive will first try to negotiate an enhanced package with his or her counsel in the background (using counsel for advice, but conducting the negotiation independently). This approach is less confrontational and may serve to maintain a better relationship with your employer/former employer. Many factors in such negotiations are personal or political rather than legal, in which case the executive may be better qualified to present the situation in a compelling fashion. If the executive chooses to negotiate him or herself, the choice of whom to negotiate with is of particular tactical importance. If possible, it is generally better for an executive to deal with a person in his or her management chain with whom there is a pre-existing relationship, than with a human resources representative who the executive does not know. If this approach of independent negotiation proves unfeasible, then the executive's lawyer can negotiate directly with the employer or the employer's counsel.

It is important to determine what leverage an executive has with an employer. Such legal leverage can include the threat of a law suit, or simply play on the desire of many company officials to be perceived as fair and reasonable in the eyes of others. The executive can also use a company's fear of bad publicity, guilt over having fired him or her, or friendship with high level officials in the company to his or her advantage. Such tactics are particularly useful when proposed provisions in the agreement will help the executive with little cost to the employer. If you need our Law Firm on your side call us day or night at 800-862-1260. The initial consultation is free and in many cases we are only paid upon the completion of the case and out of any recovery, if any.