more-arw search

Q&A Forum

Employment release

I recently was let go from my previous employer and was provided a general release - by signing it I will waive claims/disparagement, in exchange for receiving a severance. The severance amount is immaterial for me and I don't feel comfortable to sign such release. Should I inform the company that I will not sign it? Also, by not signing it, what's the consequence - I read the documentation and it does not seem to expose me for any additional obligation, but will it be perceived by the company that I am "burning the bridge"?

Answers

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

The only consequence should be no severance.

A) Talk with a lawyer
B) know that even a separation agreement can be negotiated.

Michael Garibaldi
Title: Owner
Company: MTG & Ass., Ltd.
(Owner, MTG & Ass., Ltd.) |

Do you have a claim? No? Then sign it and move on. Wasting your time negotiating something that doesn't matter is a fool's errand. Take the severance and move on with your life. If you have a claim, evaluate your stance and consult an attorney.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Michael,

Since we haven't seen the separation agreement, telling someone just to sign it is bad advice. It may be accurate advice, but any contract that has a general release and non-disparagement (which I'm sure is one-sided) section deserves a look by the person's attorney.

I have seen some interesting separation agreements; some not so benign.

Kevin Roones
Title: Senior Accounting Professional
Company: In-between
(Senior Accounting Professional, In-between) |

Signing such an agreement in exchange for severance is standard operating procedure at some companies in exchange for agreeing to not sue them for wrongful termination, age discrimination, etc.

I can't tell from your posting if you don't feel comfortable signing the release due to the wording of it or if you have a problem with it conceptually.

If you don't have any ax to grind with the company and you are not contemplating taking legal action against them I don't see any reason not to sign it, take your severance and move on. Why incur legal fees if a problem doesn't exist?

If your problem is with the wording, you want to preserve your rights and you don't need the severance then I would say don't sign it.

Anonymous User
Title: CFO
Company: Local Government Agency
(CFO, Local Government Agency) |

You can't sign away your civil rights by signing that document. So, if there is a legal case for wrongful termination based on law such as being a member of a recognized, protected class, signing it won't make your ability to file a wrongful termination claim disappear.

Which is why I've found it so amusing that companies tie severance packages to this. If they haven't done anything wrong, there is no recourse and thus no worry. If they have, it won't mean much that the employee being terminated signed it in the first place.

The only thing it can do is help the company deflect any post employment lawsuit you might bring of a civil vs a criminal nature. i.e. if you try to sue them post employment for an implied contract, they can use the document as a defense. But, if they terminated you for age, it won't matter one iota that you signed that agreement.

Chris Holtzer
Title: Senior Manager - Strategic Analysis
Company: Sargento
(Senior Manager - Strategic Analysis, Sargento) |

You make a very good point about civil vs criminal cases. The problem you are overlooking is that the civil cases are often more expensive to litigate and almost always more expensive to settle. Civil cases spend a lot more time talking about the gray (almost exclusively), while the legal cases are more black and white. Even if a company wins a civil case, they are going to be looking at substantial costs to get to a verdict. The waiver gives them a pass from most civil disputes.

The other substantial clause that is overlooked is the waiving of your right to file for unemployment. By signing the document you are usually resigning, not being let go. You would have to weigh the risk/benefit for you, but typical severance is less than long term unemployment benefits. That said, if you regain employment quickly, its extra cash for you.

Anonymous User
Title: CFO
Company: Local Government Agency
(CFO, Local Government Agency) |

"By signing the document you are usually resigning, not being let go."

Very true! And, a factor I forgot about.

Which is almost unforgivable as I work in the public sector where, execs are almost never "let go". Public agency boards always "seek resignation".

Personally, I hate this as, it is frequently a euphemism for "we caught him with his hand in the cookie jar and told him so and are letting him resign rather than taking the responsibility to fire him as our fiduciary liability would dictate". This lack of candor amounts in many cases to a gift of public funds and allows the incompetent or criminally active exec to go out and do it all over again somewhere else.

The real kicker is, in most public sector jobs, the GM works under a contract and that contract includes two or there year's of full compensation no matter the reason for termination. Obtaining a contract position like this is akin to winning a small lottery. Even in positions so minimal and obscure as a the head of a local sanitation district.Even if you fail, you are handsomely rewarded..........with other people's money of course!

Jeff Durbin
Title: Chief Financial Officer
Company: F. Gavina and Sons, Inc.
(Chief Financial Officer, F. Gavina and Sons, Inc.) |

Chris is wrong about unemployment. Agreeing not to sue them in exchange for severance doesn't change the fact that you were laid off.

Bottom line is to chat with an employment lawyer. I agree with Wayne.

Topic Expert
Christie Jahn
Title: CFO
Company: Prime Investments & Development
(CFO, Prime Investments & Development) |

Chris mentions the unemployment which was my thought. In my experience a company will offer unemployment and ask you to sign a release stating you resign and by giving you severance they don't want you filing for unemployment.

The other comments mimic mine as well, unless you plan to seek legal action, what is keeping you from signing, taking the severance and moving on? Companies are not obligated to offer severance.

Anonymous User
Title: CFO
Company: Local Government Agency
(CFO, Local Government Agency) |

Although logical reasoning and knowledge of UI benefits would indicate that one could not receive such benefits if they resigned instead of being laid off or fired, real world experience in the People's Republic of California says differently.

I'm sure there are others here who've had to learn the hard lesson that employers are wasting their time fighting UI claims in CA no matter the just cause. Nine times out of ten the hearing officer will side with the claimant. As one hearing officer said to me, "What? Do you want them to starve too?"

Sara Voight
Title: Controller
Company: Critical Signal Technologies, Inc
(Controller, Critical Signal Technologies, Inc) |

I was able to negotiate language changes in my separation agreement many years ago. We added language that clearly held them responsible for not disparaging me, including being responsible for what their staff might communicate, and it allowed me to file for unemployment after the final severance payment was made. This only 'delayed' my ability to file for unemployment to cover the time the employer still had me on their books. I didn't actually file for unemployment, but the option was important to me.

Also, depending on the state you live in, a separation agreement might not mean anything as far as unemployment. Regardless of the language in it. Please review with a lawyer to get a full understanding of what your rights are.

Anonymous
(Chief Financial Officer) |

Good advice.

My youngest sister got laid off after 16 years and received a package worth almost a half million dollars and still collected unemployment from day 1 because that is Illinois' silly rules.

Many states require that you exhaust your severance before collecting unemployment.

Lyle Newkirk
Title: CFO
Company: Corrigo Incorporated
(CFO, Corrigo Incorporated) |

Most companies will make a waiver of your right to sue as well as anti-disparagement language a condition of receiving severance. You should not disparage anyway as it will make you look bad to a future employer. Unless you have a claim I don't see a problem with waiving your right to sue. But the point above about unemployment perhaps matters. Make sure that what you sign makes it clear that the company elected to end your employment, not you.

Anonymous
(CFO) |

"makes it clear that the company elected to end your employment, not you" In my own experience, companies will not do this. Part of their "enticement" with the severance offer is for you to resign and they want that on the record that way. For many reasons.

3571 views

Get Free Membership

By signing up, you will receive emails from Proformative regarding Proformative programs, events, community news and activity. You can withdraw your consent at any time. Contact Us.

Business Exchange

Browse the Business Exchange to find information, resources and peer reviews to help you select the right solution for your business.

Learn more

Contribute to Community

If you’re interested in learning more about contributing to your Proformative community, we have many ways for you to get involved. Please email content@proformative.com to learn more about becoming a speaker or contributing to the blogs/Q&A Forum.