Severance agreement holds up, despite unusual promise — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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Severance agreement holds up, despite unusual promise

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Finally, some good news for employers! A severance agreement that releases all claims against the employer will likely be enforceable in North Carolina, even if the employee claims her supervisor promised other benefits.

Recent case: Karen McQuade learned that her employer, Xerox, was undergoing a reorganization. Her supervisor allegedly promised he would rehire her—if she agreed to sign a severance agreement. She signed the agreement, an action that allowed her to continue collecting paychecks for several months. The agreement also included a waiver of any and all claims she had against Xerox.

Then the company didn’t rehire her.

She sued, alleging that she wouldn’t have signed the severance agreement if she knew she wouldn’t be rehired. The court tossed out her claim, noting that the agreement was very clear. (McQuade v. Xerox, et al., No. 5:10-CV-149, ED NC, 2011)

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