Legal Insider: Signing a Severance Agreement in Virginia

This is a sponsored column by attorneys John Berry and Kimberly Berry of Berry & Berry, PLLC, an employment and labor law firm located in Northern Virginia that specializes in federal employee, security clearance, retirement and private sector employee matters.

By Kimberly H. Berry, Esq., www.berrylegal.com

Many employees that leave or are terminated from their employment in Virginia enter into severance agreements. Most employees in Virginia are considered “at will,” which generally means they can be terminated or resign at any time. Even if these employees are “at will,” an employer may offer severance to an employee in exchange for an employee’s waiver of their rights, including the right to file suit for any work-related issues (e.g. discrimination/harassment claims).

In the absence of an employment contract, an employer usually has no obligation to provide an employee severance pay. If severance pay is offered, an employer will always require that the employee sign a severance agreement, which will include a general release of liability. It’s very important to obtain legal advice before signing such an agreement.

What is a Severance Agreement?

A severance agreement is simply a contract between an employee and an employer that spells out the terms of an employment departure. Severance agreements can be offered in cases of terminations, resignations, layoffs or in other situations.

In order for a severance agreement to be valid, it must typically provide something of value to the employee. For example, in most cases, financial benefits are provided to the departing employee by an employer in exchange for a waiver of the employee’s rights. Often, an employee receives continued salary for a period of weeks or months in exchange for a release.

The terms of a severance agreement are generally negotiable between the employer and employee (and their attorneys).

Areas of Consideration in Severance Agreement Terms

Some of the issues that can be bargained over in severance agreement include, but are certainly not limited to:

• Financial terms for the departing employee
• The clearing of termination or other discipline from an employee file
• Agreed to reference letters or contact points
• Non-compete clauses
• Non-solicitation clauses
• Non-disparagement clauses
• Non-disclosure clauses
• Re-employment/re-hiring clauses
• Health benefits
• Unemployment compensation issues
• Description of claims waived
• Preservation of trade secrets

Each severance agreement is different, and an employee can typically benefit in negotiating the specific terms involved with the employer.

Before an employee enters into a severance agreement, he or she should consult with an attorney to discuss the rights that he or she may be waiving and the terms of the severance agreement. An employee will want to ensure that they know what they are signing and any potential admissions that they are making.

Conclusion

If an employee needs assistance in negotiating a severance agreement in Virginia, please contact our office at 703-668-0070 or at www.berrylegal.com to schedule a consultation. Please also like and visit us on Facebook at www.facebook.com/BerryBerryPllc or follow us on Twitter.