Getting laid off is a stressful experience. Between the shock and the scramble to find a new job, it’s easy to feel overwhelmed. One important step you shouldn’t rush, however, is reviewing and signing your severance agreement.
This document outlines the financial compensation and other benefits you’ll receive upon leaving your position at your employer’s company. While it may seem like a straightforward matter, taking the time to negotiate your severance agreement when you sign onto a position can significantly benefit you in the event that you’re ever laid off.
You might be leaving money on the table
Severance packages are often designed with a company’s interests in mind. The initial offer might be the minimum they are legally obligated to provide. By negotiating, you have the opportunity to secure a more financially secure transition.
Don’t be afraid to ask for a higher payout. Research industry standards for similar positions and consider your tenure at the company. Remember to negotiate for continued health insurance coverage, COBRA subsidies or other benefits to bridge the gap until you find your next job.
Protecting your future opportunities
Severance agreements often contain clauses that can impact your ability to find new employment. Carefully review non-compete agreements. These restrict your ability to work for a competitor for a set period. You may want to negotiate for a shorter timeframe or a more geographically limited clause.
You’ll also want to keep in mind that a non-disclosure agreement (NDA) may prevent you from disclosing confidential information about your former employer. Therefore, you should try to make sure the NDA is reasonable in scope and duration.
Take care to spot any terms dictating a release of claims, as you might be giving up your right to sue your employer for wrongful termination or other workplace issues.
Consulting with a legal team can be beneficial, especially if your severance agreement is complex or you have concerns about specific clauses. They can help ensure your rights are protected and that you receive a fair outcome if things go south down the road.
