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Draft severance agreements to prevent future lawsuits

by on
in Compensation and Benefits,Human Resources

Have a lawyer draft any release that accompanies a severance payment. If the employee sues and the release was carefully written, the court will probably say it bars suing—and may require repaying severance money before the worker can even try challenging the release’s validity.

Recent case: Rander worked at Ann’s House of Nuts in Robersonville. When he was laid off, he accepted a one-time payment of $38,000. In exchange, he waived any claims he might have against the company.

Rander sued anyway, claiming he later discovered that the layoff was allegedly a cover for discrimination. But the court said since Rander had kept the money, he now couldn’t challenge the agreement or claim discrimination. (Harris v. Ann’s House of Nuts, No. 4:13-CV-0039, ED NC, 2013)

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