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Serrins & Associates LLC Employment Law Blog

Sunday, April 29, 2018

A Quick Guide to New York Severance Agreements

New York is an “at will” employment state. This means that generally speaking, employers have the right to fire or lay off employees as they see fit. There are some important exceptions to this rule - for example, an employer may not fire a worker for being a member of a legally protected class. But barring a malicious or illegal act on the part of an employer, it remains the case that workers in New York can be legally fired for many reasons, or even no reason at all.

That said, many employers will request (some more forcefully than others) that an employee sign a severance agreement (also known as a separation agreement) upon leaving a job. There are many practical reasons for this. Some employers do it as a matter of custom and fairness. Others wish to protect confidential information or trade secrets - in these cases, the severance agreement will contain a confidentiality or non-disclosure clause, which you can learn more about here. Sometimes they have you sign a general release to avoid a future lawsuit. For example in the case where an employee leaves under contested or hostile circumstances. There are also instances in which a severance agreement is essentially required: when the employee has a written contract with the employer.

No matter the reason, most employees being asked to sign a severance agreement should consult with an attorney, who can help guide them through the process and negotiate it on their behalf.

It’s natural to think that as an employee facing a layoff, you have one primary concern: money. Specifically, how much will your soon-to-be-former employer pay you to sign a contract. But contracts are legal creatures - phrasing that might not mean anything to a layperson might strike a lawyer as problematic, stingy, or overly restrictive. Once that severance agreement is signed, that’s a binding legal commitment, a breach of which can result in a legal battle. In other words, while the dollar amount is important, it’s far from the only consideration an employee has in a negotiation like this.

And yes, the help of a lawyer can increase that dollar amount. Many employees don’t quite know what leverage they actually possess over their employer. An employment lawyer would understand not only the employer’s hidden motivations, but how to use those motivations to the employee’s advantage. Of course, an employee without a lawyer is negotiating with a business that has resources the employee can’t match. They have a lawyer, if not a whole team of them - you should too.

In sum, a New York severance agreement is not the “walk in the park” it might appear to be at first, where someone signs on the dotted line and gets handed a check. As a general rule, it’s best to have a lawyer by your side when negotiating any contract, but with severance agreements this can be even more important considering the power differences between the two negotiating parties. If you are facing a New York severance agreement, contact the attorneys of Serrins & Associates, who have decades of combined experience handling high pressure and high stakes employment contract negotiations and getting results.





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