Here are nine common things we hear from clients who find themselves on the receiving end of a severance agreement, along with answers based upon decades of employment law experience.

  1. Q: Why shouldn’t I sign this agreement? It conforms to company policy.

A: Unless you’re really sure that you want to accept the agreement, do not sign anything until you know for certain. When you sign you give up your right to sue, and even if you have no intention of suing you give away your bargaining leverage. Severance agreements may be negotiable.

  1. Q: I need time to think about this.

A: OK, but don’t lose track of time. Most agreements give you 21 calendar days (in some cases 45 days) to decide whether to accept the company’s offer. Do not wait until the last minute and back yourself into a corner. Get your decision-making process started right away.

  1. Q: I don’t have a copy of (fill in the blank with an important employment record).  

A: Gather up your employment records right away. Ideally you should have had this in place long before you need the document. We see people all the time who “think” they have a non-compete, confidentiality, or non-solicitation agreement but can’t access them because they are only on the employer’s computer system and the employee is locked out. Unused vacation days are important since you may be entitled to be paid. Have that information handy. It should go without saying that you need to keep this information in hard copy or stored electronically in a secure place outside of the company’s computer system. Preferably both. This information is needed to help secure your family’s future.

  1. Q: Why do I need an attorney? The agreement looks like a standard form.

A: You need an attorney because you don’t know what you don’t know. And yes, it is a standard form, one designed by their attorneys for the sole purpose of protecting the company, not you. Don’t be naïve about this. You just got fired. All the company cares about now is moving you out and never having to deal with you again. Sorry if that sounds harsh but that’s the way it is. Your family’s future is on the line. Consider the value of the investment to ensure that you’re doing all you can to protect them.

  1. Q: If I hire an attorney can the company revoke its offer of severance pay?

A: The short answer is no in most cases. For employees who have reached age 40 the law requires employers to tell you that you should have the agreement reviewed by an attorney. Many severance agreements extend this provision to employees of any age. If the company pulls their offer to pay you because you hire an attorney they have violated federal law.

  1. Q: What’s the use of challenging my termination? New Jersey is an employment at will state and they can fire me for any reason. 

A: We hear this one a lot. Yes, New Jersey is an employment at will state but has many laws that could give you leverage to bargain for a better deal. In fact it’s one of the most protective of employee rights of all the states. Don’t make the analysis on your own no matter how much you try to educate yourself on the internet. Only trained professional help will give you the knowledge and judgment based on experience needed to help you make a good decision.

  1. Q: I’ll try to negotiate with them first and call back if I don’t get anywhere.

A: Sorry. This never works except occasionally for a very small amount of money. Once you’ve taken your shot on your own there’s little an attorney can do for you except file a lawsuit. Don’t ask us to unscramble eggs.

  1. Q: The law gives me a week to revoke the agreement after I sign. I’ll just sign the agreement and we can negotiate a better deal later if I change my mind.

A: Like #7 above, this almost never works. You’re likely to have two choices if you choose this route: take it or leave it. Revocation is a legal right, but it’s not a strategy.

  1. Q: I’ll just sign the severance agreement, get the money, and still have time to sue for wrongful termination.

A: Yes, we have heard this one too. When you read the agreement you will find a long, single-spaced, dense paragraph of legalese called a “release” or “waiver.”  It’s part of that “standard form” stuff we addressed above. When signed it’s your promise to the company never to sue them. Ever. For anything related to your employment. Game over. You can’t have it both ways. Take the money and walk away or sue them. Those are your choices.

Contact Steinberg Law, LLC to discuss your employment law issue. We’re here to help.


Frank Steinberg
Committed to helping clients with employment litigation, business litigation, and aviation law throughout NJ.