As of mid-April 2020, the coronavirus pandemic has caused the loss of approximately 22 million jobs in the United States, based on the number of unemployment claims around the country since early March. With layoffs becoming increasingly common, New York City employment attorneys are seeing that more and more workers are being asked to sign severance agreements as they are shown the door. State and federal law regulate certain aspects of typical severance agreements, so New York City workers should consider seeking a legal opinion before signing anything.
What Is a Severance Agreement?
The term “severance agreement” can refer to any document that purports to show an agreement between an employer and an employee at the end of the employment relationship. A severance agreement is usually part of a “severance package,” which might include additional compensation besides wages or salary already owed to an employee. This could be a cash payment, stock options, or contributions to a retirement account.
Waivers of Rights in Severance Agreements
The employer, of course, expects something in return. In exchange for the additional compensation in a severance package, a severance agreement might contain a clause waiving the employee’s right to bring claims for wrongful termination, discrimination, harassment, or retaliation. The only way for a waiver of these rights to be enforceable is if the employer gives something in return. This is where severance agreements can be dangerous for workers.