Articles Posted in Severance Agreement and Severance Package Negotiation

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Thumbnail image for Severance.Agreement.Lawyer.DPC.3.4.16.jpgOur Award Winning New York Severance Agreement Lawyer has counseled employees and former employees of Pepsico including its affiliates, subsidiaries or related companies (i.e., Frito Lay, Quaker Oats, etc.) Pepsico, which has its headquarters in Purchase, Westchester County, is one of the largest food and beverage producers in the world and reportedly has more than 270,000 employees. In recent years, the Company has instituted some layoffs. If you have been affected by a layoff or a job separation for other reasons (e.g., termination for cause, resignation, discrimination, harassment, retaliation), you should consult with an experienced employment lawyer to learn your rights and options.

Although companies in general are not required to provide severance pay, many do primarily in order to obtain a general release of claims. If you have been presented with a severance agreement, it is important to have it reviewed by an attorney before you decide whether to execute it or not. We have discussed severance issues before and some prior informational posts can be found here and here. Some issues to consider:
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Thumbnail image for Severance.Agreement.Lawyer.DPC.3.4.16.jpgSeverance as the name suggests means an ending. A severance package may be offered when an employee is required to leave his or her job for any reason, recession, lack of work, etc. A severance package however is not automatically offered or required; in fact, except for limited circumstances, it is up to the company, and some companies don’t offer such packages at all. Some exceptions include when you have an employment agreement requiring payment of severance or if the company has a policy or practice of providing severance. This policy could be unwritten but it may be difficult to prove. Let’s take a look at why severance packages are offered and why you should have an attorney review one before you sign it (some agreements will even state that the Company advises you to seek legal counsel regarding its terms).
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Non-Disparagement.Confidentiality.Severance.Lawyer.DPC.3.4.16.jpgOur NY Severance Package Lawyer is often asked to provide some tips and pointers in severance negotiations and contract review. Most people just focus on the amount of severance pay in a separation package but the non-economic terms can be critical as well. Many employers include a non-disparagement provision in their severance agreements. In general, a non-disparagement provision prohibits individuals from making any statement or taking any action that negatively affects your former employer, its products and services, and employees. This provision can have long lasting consequences.
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Male.Employee.Fired.Severance.Dollar.Phot.Club.12.24.15.jpgOur Award-Winning New York Severance Agreement Attorney has represented current and former employees of Morgan Stanley who were affected by layoffs, position eliminations or subject to other disciplinary action. It was reported that earlier this week, Morgan Stanley has started to lay off employees in its credit division including bond traders. Morgan Stanley is the sixth largest bank in the country based on assets and reportedly has 60,000 employees globally. Layoffs in the financial sector in general have been a function of business operations, regulations and competition. If you or someone you know was laid off or otherwise disciplined, contact our NY Severance Package Lawyer to discuss the facts and circumstances and determine options, rights and potential next steps.

Why It Is Important to Have Your Severance Agreement Reviewed By An Experienced Employment Law Attorney

It is never a good time to lose one’s job especially around the holidays and when employers may not be looking to hire. Being unemployed is difficult enough but having a non-compete agreement or another form of a restrictive covenant can impede your ability to find another job in the financial services sector. Some severance agreements can include a restrictive covenant even if you did not sign one during your employment. Critically, severance agreements typically state that employees should not sign them without consulting an attorney. There is a good reason for them to be reviewed because they are generally written for the company’s benefit, not necessarily yours. Furthermore, in addition to the inclusion of a restrictive covenant, the agreement can contain numerous post-employment obligations that can affect your job search process. Below are some reasons why it can be valuable for an attorney to review a severance agreement.

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Thumbnail image for Severance.Pay.Green.Board.Dollar.Photo.Club.4.7.15.jpgOur Award-Winning New York Severance Negotiation Lawyer has counseled former employees of Mount Kisco Medical Group (MKMG) who were laid off, had their positions eliminated or who were adversely affected by disciplinary action. Recently, MKMG announced it was laying off 109 workers and reportedly offered them a minimum of six weeks of severance pay following a 90 day notice period. MKMG was established 70 years ago and reportedly has approximately 2,700 employees. It is one of the largest employers in the Westchester area. If you or someone you know was selected for a layoff or otherwise terminated, contact our NY Severance Package Attorney to discuss the situation and determine available rights and options.

Losing a job and an income can be a traumatic process for a family and understanding the legalese in a severance agreement that is presented during this process can be difficult. In general, an employee should not sign a severance agreement without speaking to an experienced employment attorney. The severance agreement is typically written primarily for the employer’s benefit – not yours and often contains many post-employment obligations and restrictions on you. Below are some reasons why you should have an attorney review a severance agreement.

REASON ONE: WAIVER OF CLAIMS: In general, severance agreements include a General Release provision, which means that you are agreeing to release your former employer from almost all legal claims – known or unknown. Depending on your circumstances, you may have a claim that is worth more than the amount of severance offered. It is important to have an attorney to evaluate your specific situation and determine if you are waiving a valuable claim. Although they are certain claims that cannot be waived like filing a claim for unemployment insurance benefits, a separation agreement provides assurances to a company that you will not file a claim regarding your employment for money damages against it. In general, you cannot sign a severance agreement and sue your former employer for money damages based on conduct that occurred prior to your execution of the agreement.

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Severance.Pay.Green.Board.Dollar.Photo.Club.4.7.15.jpgThis is a question that our Award Winning New York Employment Lawyer is often asked. In general, employers are not required to provide severance pay to former employees except in limited circumstances. Some of these circumstances can include the following:

NUMBER ONE: If you have an employment contract or other agreement that states you are entitled to severance pay upon separation (or alternatively, you are entitled to a notice period prior to termination). A verbal agreement can come into play in these situations but proof can be an issue. Employment agreements are typically given to executives, sales personnel, management personnel and physicians but the terms can vary widely. It is important to review the terms of your agreement carefully as severance may be paid depending on the reason for your separation – (e.g., it is paid if your employment is terminated without case but not if your employment is terminated with cause).

NUMBER TWO: If you are a member of a union and the employer is subject to the terms and conditions of a collective bargaining agreement that includes a severance pay provision;

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sexual.harassment.dollar.photo.club.3.11.15.jpgOur New York Sexual Harassment Lawyer has been asked to comment on the ongoing litigation commenced by a former sales representative against Zillow Inc. The complaint was filed last year and alleges that there was a hostile work environment similar to an “adult frat house.” Specifically, the complaint alleges that the “male supervisors ranked the plaintiff according to her breast size, sent pictures of their penis to her, and demanded sexual gratification and obedience by the plaintiff to continue her employment.” Further, the plaintiff alleged that certain supervisors sent her emails referencing adult sex toys, requested pictures of her breasts and sent her numerous sexually harassing text messages. Some of the text messages were attached to the complaint. The Plaintiff alleges that the hostile work environment caused her performance to decline and that she was fired for failing to meet her sales goals. She claims she was offered a severance package but rejected it and elected to pursue a lawsuit.

The Company’s Defense & The Motion to Dismiss

The company has denied any liability and has stated it will vigorously defend itself against the allegations. In fact, the company filed a motion to dismiss the complaint. Last month, the Court granted its motion, in part, by dismissing several claims but the main sexual harassment claim was allowed to proceed at this early stage. The Court’s decision can be perceived as a win for both sides – the company was successful as certain claims were dismissed (i.e., civil harassment, intentional infliction of emotional distress, negligent infliction of emotional distress, negligent retaliation and supervision, and retaliation claims) and the plaintiff was successful in that she can engage in discovery to prosecute her sexual harassment claim based on a hostile work environment. During discovery, parties can request relevant documents from the opposing party and depose witnesses. The information obtained could bolster or undercut the claims – some of the expected areas of inquiry will be whether any other employees were fired for failing to meet sales goals and whether there are emails or other communications regarding a hostile work environment. Discovery can be voluminous due to the multiple methods employees communicate in the workplace today (e.g., text messages, instant messages, emails, voice-mails, social media, etc.) Based on the information alleged to date, you can expect that discovery will be a battle for both sides.

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Thumbnail image for Thumbnail image for Female.Employee.Fired.severance.jpgOur Award Winning New York Severance Agreement Lawyer has counseled former employees of AOL (including its subsidiaries and related entities), who were laid off, had their positions eliminated or were adversely affected by discipline or other means. Last Friday, AOL announced that it had restructured its workforce and laid off over 100 employees across several departments – sales, legal and human resources. The sales department appears to be the most affected as sales people were let go in favor of programmatic or automated ad sales. Some of the affected employees are from the tri-state area. If you or some you know was selected for a layoff or terminated and presented with an offer of severance, contact our Severance Package Attorney to learn your rights and options on a confidential basis. You may be able to increase the terms of your severance package. In the current job market, gaps of unemployment occur regularly and it can be difficult to obtain new employment quickly – as a result, it is imperative that you maximize the terms of your overall severance package. We have helped clients navigate while dealing with a lost job and income. In general, you should not sign a severance agreement without speaking with an experienced employment lawyer first – the agreement is written for your former employer’s benefit, not necessarily yours.

The following five examples show how a severance agreement is your employer’s benefit and why you should seek counsel immediately – be aware that most agreements have a deadline for you to accept or reject them – the deadline may be 45 days, 21 days or another date – to prevent a last minute or a pressured decision, you should seek counsel immediately:

FIVE EXAMPLES WHY YOU SHOULD HAVE YOUR SEVERANCE AGREEMENT REVIEWED

ONE: Almost all severance agreements will include a provision stating that you are agreeing to waive any and all claims against your former employer and release it from liability. This is valuable for your employer and it is something you must consider so you can weigh the strength of pursuing a claim ( and your options) versus resolving it initially. In essence, the company is securing your promise never to sue them or bring a claim. If you have a valuable claim against the Company, your severance amount should reflect that. You should speak with experienced employment lawyer to determine if you have a claim against your former employer and what is the value of such a claim. In general, you cannot sign the severance agreement and then sue your employer for actions that occurred during your employment. That being said there are a few exceptions to claims that cannot be waived under state law (e.g., unemployment insurance, workers compensation) but they are limited and may depend on state law.

TWO: A severance agreement may include restrictive covenants also known as a “golden handcuffs” clause which can limit your post-employment ability to compete or solicit future business or employment. This can be significant and negatively impact you for years after your termination and harm your job hunting prospects. It is critical to review these provisions carefully and understand how their potential impact on you. Not only could you be unemployed, your ability to find a new job could be made harder as well. A common misconception is that restrictive covenants are not enforceable – that is not always the case. Courts have enforced these provisions in the past and you should simply expect that they cannot be enforced.

THREE: One of the top reasons individuals go bankrupt is incurring high medical bills while not having medical insurance. Losing your job is daunting enough but not having insurance can be risky. In general, coverage under your former employer’s healthcare plan terminates on your last day of employment. However, in some cases, it can be extended to the last day of the month you were employed – this depends on your employer’s policies on health insurance. You should receive written notification from your former employer regarding the termination of your coverage. You should understand whether there are arguments for your former employer to continue paying your healthcare premiums after your termination or you should elect coverage under COBRA or state law.

FOUR: You could be entitled to certain payments even if you do not sign the severance agreement. Moreover, the severance agreement can affect your ability to collect unemployment insurance benefits, which can be critical in this time. It is imperative that you understand your rights and obligations if you sign the severance agreement and if you do not. In addition, based on recent changes to state law severance payments can affect your ability to collect unemployment insurance benefits.

FIVE: Depending the circumstances, a severance contract can include a re-employment provision stating that you cannot apply for re-employment with the Company and its affiliates (which are often not defined and can be vague). Depending on the size of the Company, you could be precluded for working for a significant number of companies. Again, that is not ideal when you are looking for new employment.

Call our Severance Attorneys at (800) 893-9645 to confidentially discuss your rights and options so that you can negotiate the best possible severance package you deserve to help you navigate through these difficult times. We will review your agreement paragraph by paragraph with you so you understand the ins/outs of your agreement. We will let you know how we can maximize your severance package.

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above-the-bar-logo-no12Many employees and former employees ask our award-winning New York Employment Lawyer this question. This can be a difficult and delicate situation. Our employment law attorneys have helped clients get paid whether it was unpaid wages, bonuses, commissions or shares. There are several things you should considering doing. First, you may want to discuss the reason for non-payment with the company and see if the company agrees with you the fact you are owed money and the amount you are owed. It may helpful to get the Company’s acknowledgement in writing. Second, if an acknowledgement is not an option, make sure you keep track of all hours that you worked that you were not paid for. Although your employer is required by law to maintain accurate time and payroll records, in some instances they do not and quite frankly, there may disputes between your hours worked and the company’s records. Your records could be helpful in pursuing a claim. Unpaid wage claims by New York State based employees are typically are brought under two laws – The Fair Labor Standards Act and The New York Labor Law.

FEDERAL LAW — The Fair Labor Standards Act (FLSA) is the federal law that governs minimum wage, overtime pay, and recordkeeping regarding full-time and part-time workers in the private sector and in public sector. It is important to note that the federal law does not apply to every employer – in short, it applies to employers whose annual gross volume of sales made or business done is more than $500,000 and who have workers engaged in interstate commerce, producing goods for interstate commerce, or handling, selling, or otherwise working on goods or materials that have been moved in or produced for such commerce by any person. If a company is engaged in interstate commerce but the gross sales volume is slightly less than $500,000.00, in certain circumstances, a claim could be filed and litigation/discovery could focus on the monetary limit. In general, the time to bring a claim under the federal law is 3 years for willful violations and 2 years for other violations. Liquidated damages intended to be a penalty may also be available.

STATE LAW — The New York Labor Law (State Labor Law) applies to many more employers and does not have $500k gross annual sales requirement. Importantly, the statute of limitations time to bring a claim is six years. As a result, the state law is broader is time and scope and affords greater protection to employees. The state statute also provides for penalty in the form of liquidated damages. Connecticut and New Jersey have state statutes as well.

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above-the-bar-logo-no12Don’t get me wrong – form agreements can be a terrific resource but in the employment law context they are not one size fits all. When used incorrectly, form agreements can also be very dangerous and have disastrous consequences. Over the years, I have meticulously prepared hundreds of employment agreements, severance agreements and other employment-related agreements for specific client needs but still am surprised at how often some businesses will use an old agreement or sample agreement online (from who knows what site) for a different purpose without realizing the risks associated with doing so. This blog post briefly describes some of the most common errors when using a template agreement – before you take any employment-related action, companies should contact experienced employment law counsel to learn specific legal obligations to ensure all steps taken are in accordance with the law. Our award winning employment law attorneys have advised and counseled many businesses regarding a range of workforce related matters including severance agreements and issues related to separation. Contact our office if you would like to discuss a specific legal issue and how to best protect your rights and interest. As the examples below demonstrate, it is critical to speaking to an experienced employment law attorney before you take any decisions.

EXAMPLES OF THREE COMMON MISTAKES

1. Outdated or inapplicable Law: Employment law is a constantly changing area of the law where new court decisions and governmental positions are issued on a frequent basis. These decisions can affect the validity of the agreement, in full or in part. It is not a safe assumption that an old agreement is current and contains all of the legal requirements. If you are going to provide severance pay in exchange for a release of claims, you should get what you bargained for and expected – not an ineffective agreement or invalid clause. Second, it is not wise to use an agreement that was prepared for an employment situation in a different state or a different scenario. For example, a severance agreement drafted for an employee in New York may not contain all of the legal requirements for an employee in California. State laws vary and some states may require specific language and without this magic language – the full effect of your agreement may be compromised. In addition, in order to waive certain claims, specific language needs to be included and if the other agreement did not include it, you would not know it was necessary for your situation.

2. Not a fit for your organization: Not every employment-related statute applies to every company. For example, Title VII of the Civil Rights Act of 1964 which prohibits employment discrimination in certain protected categories generally applies to companies with twenty or more employees. Under certain situations, there is specific language required in a release agreement to include a waiver of a Title VII claim. Some companies have paid severance money to employees pursuant to a poorly drafted agreement only to have the employee sue them later because the release agreement was not effective. I don’t have to tell you that is a disaster – you have now in essence funded the employee’s lawsuit against you. Not ideal.

3. Does not fully consider impact on non-compete and confidentiality agreements previously signed by an employee: If an employee signed a non-competition agreement, ideally, an agreement should mention that all obligations in that agreement remain in effect. A form or old agreement may neglect to do so and may in fact do the opposite and negate the non-compete provision by including a clause that states the severance agreements contains all understandings and obligations regarding the employee. This could effectively eviscerate the employee’s non-compete obligations if not done properly.

The above examples briefly illustrate the importance of speaking with an experienced employment law before you take any action so you can develop an appropriate action plan. You may think that using a form agreement or an old agreement could save you a few dollars but it could actually turn out to cost you much more including taking away your time from running your business.
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