Severance Negotiations

The State of Connecticut is considered an “employment at will” state, which means that an employer does not need to provide, nor even have a reason to terminate an employee unless the employee has a contract for employment.  There are exceptions to this general rule which are outside the scope of this article including termination based upon an employee’s race, gender, disability and any other membership in a protected class as outlined in Connecticut General Statute Section 46a-51, et seq.

Outside of these prohibited discriminatory/retaliatory reasons for termination, an employer is free to decide when to terminate an employee’s employment.  Many times upon termination, an employer will offer a departing employee a “severance package” which may include a payment of a lump sum or the continuation of a certain number of weeks of the employee’s prior salary.  In order to obtain these benefits, the employee must usually sign a “Severance Agreement,” which outlines the rights and responsibilities of the employee and the employer in exchange for the payment of funds.  The main component of the agreement is the release language in which the employee, in exchange for the payment of their salary or a lump sum, agrees to not sue their employer for any claims which the employee may have had from the beginning of time, until the date of their signature on the agreement.  This would include, but is in no way limited to, wage and hour and discrimination claims.

An agreement may also contain what are considered “restrictive covenants” in which an employee may agree not to seek or obtain employment with any competitor of their former employer within a certain amount of time after their termination and within a certain geographic area, and/or agree not to solicit any of the employer’s former/current customers or employees.

The release language and the restrictive covenants are the keys to these agreements for the employer.  At this point, the employee has a decision to make which is to either sign the agreement and accept the severance and enter into the restrictive covenants, or choose to keep their right to sue and walk away from their employment with no severance payment.  Many times, the severance offered by the employer is merely a starting point and is not a final offer as to the amount of severance that the employer is willing to offer. If the employee has experienced discriminatory treatment or their termination was based upon characteristics other than their performance, an attorney may be able to negotiate with the employer for an increased severance or relaxed restrictive covenants in exchange for the employee’s signature on the release of claims.

If you are an employee and are facing termination with a severance agreement, make sure your rights are protected and that you are provided the severance that you deserve and can help you through the upcoming time of work transition.  Please call the experienced employment counsel at Harlow, Adams & Friedman, P.C. today at 203-878-0661 for a free consultation.

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