A severance agreement may be a cover-up.Severance is the act of cutting off—or severing—a relationship. The term is most commonly used these days in describing the deal you might be offered when you are let go from a job—as in severance agreement or severance package

If you are offered a severance package when you are laid off, you might feel fortunate. After all, your employer does not have to give you money and benefits when they fire you, so it must be a good thing, right? That all depends on why you are being terminated.

Know the Reason for Your Firing

There are several reasons that an employer will offer a severance package. For contract workers, it might have been included in the terms of the contract. For at-will employees, severance packages might be offered when an employer is cutting back on employees reluctantly due to budget constraints and wants to do all they can for the terminated workers.

However, if you don’t know why you are being fired, and you are offered a severance package, that could be an indication that your employer is worried about a lawsuit and wants to unofficially “settle” any claim they think you might make later on. This could be a concern if you:

  • Are a member of a protected class. If your race, ethnicity, gender, sexual orientation, disability, or other characteristic puts you in a protected class under the New Jersey Law Against Discrimination, a severance offer could be a red flag
  • Have been sexually harassed on the job. If you have been harassed by a superior or coworker—whether you have filed an official complaint or not—and are being let go with a generous benefits package, this could indicate that your employer is worried about a lawsuit.
  • Reported your employer to a government agency. As a whistleblower, you are protected from adverse action under both state and federal law. Even if you don’t think your employer knows you reported them, being fired with a severance package soon after could be too much of a coincidence.

It’s possible that your employer knows you potentially have grounds for a lawsuit and wants to protect themselves by offering what they think is a generous severance package. They might also require you to sign an agreement that you will not sue in exchange for the package. Before you sign anything, you owe it to yourself to consult an employment lawyer.

Let Us Help You Decide What’s Best for You

Even if you might have grounds for an anti-discrimination or whistleblower lawsuit, the stress and expense of a trial might not outweigh the severance offer you have been given. Only an experienced employment lawyer can tell you for sure. And, if you do have a strong case, a lawyer could negotiate a better severance agreement so that you get what you deserve and avoid a trial as well.

If you find yourself in this situation in New Jersey, contact Frank Steinberg to discuss your options. We have your best interests in mind!

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