8 Benefits Employer and Employee Exchange for Severance

Severance pay is a matter of agreement between an employer and an employee. It is an agreement that the employer will provide a payment and/or benefits to an employee at the termination of employment. This agreement is usually called a severance agreement or a separation agreement. In the absence of a legislative mandate, employers are incentivized to make offers of severance packages generally in exchange for valuable promises from the employee which would otherwise not be enforceable for lack of consideration. These promises usually include the following top 8:

  1. Agreement not to litigate or sue the employer

  2. Release from certain employment contract terms

  3. Release from future potential legal claims or disputes

  4. Indemnity for tax and other liabilities

  5. Confidentiality of the agreement

  6. Non-competition with the employer’s business interests

  7. Non-solicitation of the employer’s customers, clients and employees

  8. Non-disclosure of company trade secrets and other valuable confidential company information

In the event that one is fortunate to receive severance pay, a company may require the employee to sign documents such as a release and waiver of claims, hold harmless or indemnity agreement, etc., before releasing severance pay.  It is important to note however that not all legal claims can be waived. For instance, any agreement which prevents an employee from participating in an Equal Employment Opportunity Commission (EEOC)  proceeding or a Security Exchange Commission (SEC) inquiry is void ab initio for illegality.

Although severance pay is usually based on length of employment, some companies are willing to negotiate the severance package with otherwise ineligible employees to include some otherwise unavailable benefits. Some of the benefits an employee would desire include these top 8:

 

  1. Cash

  2. Favorable payment terms and conditions, e.g a lump sum or annuity

  3. Health, medical, dental and vision benefits – note that pursuant to COBRA, which is a federal law that provides the employee the right to continue group health benefits otherwise terminated due to separation from the employer, employers must provide the employee an opportunity to continue coverage at their own cost; as part of a severance agreement, the employer can agree to pay these costs

  4. Retaining company equipment (such as a cellphone or computer)

  5. Forebearance from challenging an application for unemployment insurance benefits

  6. Provision of outplacement, resume and social media services

  7. Letter of recommendation and other reputation protection terms and conditions

  8. Pension rights (such as profit sharing and 401(k) plans), among several other benefits that would be case-specific

Neither of the above lists are exhaustive. In fact, what each party gives and takes is highly case-specific depending entirely on each party’s priorities and capacities. An employment attorney can assist in ensuring you, as an employer receive the greatest protection for your company through a severance agreement or that you, as an employee, maximizes the benefits payable to you for the dedicated service you’ve provided to an employer.

 

So You Think You’ve Been Discriminated Against Based on Your Race? Prove It.

We’ve all had that feeling we’ve rubbed someone the wrong way. This is a feeling that starts in our gut; it is our subjective understanding of the circumstances. Next, we try to objectively examine the way we are being treated relative to the treatment of others around us. We ask, is it me or are people of a different race being treated differently? This analysis is the same one demanded by Title VII of the Civil Rights Act of 1964 (Title VII) in racial discrimination cases. 

Racial discrimination is often manifested subtly and is difficult to detect.  It can also be extremely difficult to prove. However, one thing is certain, black Americans have faced discrimination in the workplace for the past 25 years. In fact, juries around the country are routinely awarding large sums of damages to African Americans who have demonstrated that they suffered racial discrimination in their respective workplaces. 

To prove race discrimination in the workplace, an employee must be able to demonstrate that they were subjected to an adverse job action based on their race. Generally, an employee has to prove race discrimination using direct evidence. An example of direct evidence would include, among other requirements, a memorandum, email or audio recording expressly stating something to the effect of: “Demote Jane because she is black; we only promote employees who are not black”. However only in rare cases does an employee actually have direct evidence of discrimination. Therefore, courts have accepted circumstantial (also known as indirect) evidence of discrimination. Where there is a sufficient amount of indirect evidence, the court will accept the entire compilation of evidence as proof of discrimination. An example of circumstantial evidence of racial discrimination in the workplace could include, among other requirements, a scenario where all the demoted employees were black, and all the promoted employees were white; without reason.

In order to prevail in a race discrimination lawsuit, the employee must demonstrate that:

  • They are in a protected class;
  • Qualified for a job or performing it adequately;
  • Were denied a job benefit or subjected to a negative job action.
  • The person who got the benefit or who was not subject to the negative job action, was of a different race or the company continued to search for qualified applicants. 

Proving a race discrimination case can be challenging. Additionally, there are strict timelines for reporting and filing racial discrimination claims. 

If you feel you have been discriminated against retaining the professional services of an employment law attorney will prove beneficial to assist you.