No one wants to lose their job, especially when they’ve done nothing to deserve it. When it happens, you’ll likely experience a host of anxieties about what you’ll do for work and about your finances. Your employer may offer you a severance agreement to ease your way, but does it make sense for you to take it?
What is a severance agreement?
There are two types of severance agreements. The first is a pre-employment agreement, often referred to as a “golden parachute.” In this type, the employer agrees to pay the employee a certain sum of money should they elect to terminate the employee in the future. The second type is a post-employment agreement, which is the kind we’re concerned with here.
Typically, employers are not obligated to offer severance pay. When an employer undergoes a reduction in force and decides to let certain employees go as a result, it typically has no duty to pay them anything beyond wages or holiday pay which have come due. So why would an employer part with money if it doesn’t have to?
A severance agreement may work against you
Just because employers offer severance pay, it doesn’t mean they’re hiding something or doing anything wrong. Often, it’s just a careful employer who is covering their bases. If so, taking the pay is probably your best option.
But when an employer offers severance pay, what they’re actually doing is offering you contract – they will give you money and you will agree to certain terms. Usually, this means you will be prohibited from discussing certain aspects of the employer and waiving your right to file any lawsuit against them.
This is where the agreement can disadvantage you. If you were discriminated against or harassed during the course of your employment, signing the agreement will prevent you from taking any action in the future. While the short-term gain may seem attractive, it can be less than if you pursed your legal rights. When in doubt, take the proposed severance agreement to a professional who is experienced in North Carolina employment law. They can help you decide which is the best course to take.