To prevent lawsuits over layoffs, employers often offer a severance agreement that requires the employee to waive the right to sue. When those agreements involve older workers, they have to meet very specific legal requirements.
For example, older employees can’t relinquish their right to sue unless the agreement provides them with more money or benefits than they would otherwise receive if they didn’t sign. That’s why the agreement must be crystal clear about the basis of the extra payments.
Recent case: Charles signed a severance agreement when he was laid off from Motorola. It gave him more than $80,000 in exchange for promising not to sue.
He sued anyway, arguing that the agreement was invalid because it wasn’t obvious how the payout was calculated or even that it was more than he would have received had he not signed.
The court said the case could go forward. Motorola will have to show the court how the payment compares to what Charles would have received if he hadn’t waived his rights. (Lamberti v. Motorola Solutions, et al., No. 12-Civ-2472, SD NY, 2013)
Final note: Severance agreements aren’t do-it-yourself projects. Get your attorney’s help, especially if the employees involved are over age 40. A good lawyer can create a solid package that passes legal muster. A poorly drafted agreement may be worse than no agreement at all.
Like what you've read? ...Republish it and share great business tips!
Attention: Readers, Publishers, Editors, Bloggers, Media, Webmasters and more...
We believe great content should be read and passed around. After all, knowledge IS power. And good business can become great with the right information at their fingertips. If you'd like to share any of the insightful articles on BusinessManagementDaily.com, you may republish or syndicate it without charge.
The only thing we ask is that you keep the article exactly as it was written and formatted. You also need to include an attribution statement and link to the article.
" This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/34555/how-to-create-a-valid-severance-agreement-sweeten-the-pot-above-and-beyond-the-usual "