Accepting Severance and Signing Release of Claims

It is common for an employer to offer severance to an employee who is being terminated or laid-off. The size of the severance usually depends on the circumstances of the worker’s termination and the length of his or her employment. While severance is completely discretionary and there is no law that mandates lump sum payments upon separation of employment, it serves an important purpose for the employer. Every severance payment is conditioned upon signing a document, named “Release” or “General Release” through which the employee promises to never sue the company for any possible employment related claims and violations. Thus, by making a modest payment, the company “buys” a peace of mind – a guarantee that the employee will not bring a lawsuit against the company. This is particularly important for employers, if the circumstances of termination/lay-off are suspicious and may create an impression of unlawful conduct on the side of the employer (whether the termination was wrongful or not).

Regardless if the circumstances of employment separation, it is very important that you have your Release document reviewed by an experienced employment attorney before you sign the same, to make sure it is drafted properly and fairly, that it protects your rights as well as it serves the interest of the employer, and that you are not waiving potentially substantially greater rights than your severance package, if your termination is likely to be wrongful.

You may also consider negotiating a higher severance on your own or through an attorney.