Severance Agreements and Negotiations
UPDATE TO ILLINOIS LAW-Starting January 1, 2022 a new took affect regarding non-complete clauses in severance agreements. Under the new law, there can be no non-compete agreements in any severance agreement for employees making less than $75,000 a year. Additionally, there can be no non-compete agreements for any employee making less than $75,000 a year.
What is a Severance agreement? It is a very valuable tool, which can be, utilize by an experienced Chicago employment lawyer like Peter LaSorsa to help you depart a corporation or other place of employment. In short, it is a set of terms and conditions that are agreed to by the employee and employer dictating your removal from the company.
The content of the terms and conditions are extremely important and can have an impact for the rest of your employment career. Most corporations are happy to offer some type of severance agreement because it finalizes the employment of a person leaving and guarantees the corporation will no longer have risk of a discrimination lawsuit or other legal issue. Another words, the corporation is paying money now, plus terms and conditions, in order to secure a guarantee against any issues arising in the future from the departing employee.
So why hire an attorney to negotiate the severance agreement for you? The same reason you don’t medically diagnose and operate on yourself. The corporation has a lawyer draft the severance agreement with the best possible terms for their side, the least amount of compensation for you. And they ensure you give up every remedy you may have against the corporation. The corporation also doesn’t care about possible tax implications to you for any monies you will receive. Only with the help of an experience severance agreement employment lawyer like Peter LaSorsa can you ensure you will receive your maximum compensation and best terms and conditions.
So many times people call my office after searching for a Chicago Employment Lawyer and are considering filing a discrimination lawsuit based on how they are being treated at work. At the same time, the company may have them on a performance improvement plan, also known as a PIP. I usually suggest, instead of filing a discrimination lawsuit, let me try to negotiate a severance agreement. There are several reasons why this is better for the employee.
First, if you file a discrimination lawsuit, it at some point becomes searchable to future employers. Even though an employer can’t refuse to hire you because you sued your previous employer, realistically, most employers will move on to another applicant and not hire you for that reason alone. The future employer will deem you as a potential troublemaker based on that lawsuit. Second, a lawsuit could take many years to resolve the issue. A severance agreement settlement on the other hand, resolves the issue immediately. You not only get your money but also control the narrative in the way of terms for you no longer being at the company. And lastly, if you file a lawsuit you can lose, in which case you get no money and it looks really bad to future employers.
So for those reasons a severance agreement is in the employee’s best interest. Of course you have to give up some things. You can never file a claim against the company for anything that occurred during your tenure there. Agencies like the EEOC can still perform an investigation on issues but the employee would not be able to receive any compensation based on the investigation. Companies also prefer to have an agreement in place because it gives them stability and finality regarding the employee. They don’t have to worry about getting a letter from an employment lawyer four months down the road threatening litigation. It is usually a win-win situation.
The company may even offer the employee a severance agreement without the help of an attorney. Please don’t be fooled into thinking you should just sign it and move on with your life. This agreement should always been negotiated by a professionally on your behalf. The terms and conditions will not be in your favor and you will probably be leaving money on the table. Just like your would not take the first offer from a automobile dealership when buying a car—you negotiate. In this case, have a professional negotiator work for you and get the best terms and conditions possible for you.
I have been negotiating agreement for over fifteen years and have a great deal of experience with severance agreements. Whether you need one put in place for an employee and are an employee who needs one reviewed, please call my office at 312-505-5038 or email me at firstname.lastname@example.org. I am happy to review your options and help the exit from the company with a solid severance agreement. I cover the entire state of Illinois and have an office in downtown Chicago. I am also able to handle the entire matter through email and telephone, thereby saving you time and making it more convenient for you.