Q. Can we reduce the severance amounts cited in employment agreements we have with certain staff as long as we notify them of the change?
A. You can’t unilaterally reduce the severance amounts in employment agreements that have already been signed. Typically, you can modify those agreements only with a written document signed by both parties.
You can ask employees who have existing employment agreements to enter into new agreements. You can also modify your severance policy prospectively to reduce the severance formula, going forward.
Absent a provision in an employment agreement, a severance policy or established practice, there is no independent obligation for employers to pay severance of any amount.