Severance Agreements

Severance Agreements Attorney in Cincinnati, Ohio

Some employees who separate from employers might also be asked to sign severance agreements, along with non-compete agreements, prior to them leaving. Generally, severance agreements entitle employees to receive severance compensation and certain benefits, depending on the terms. Severance pay is usually based on the amount of time an individual has been employed with the employer, as well as the individual’s salary or wages. What many employees do not realize is that employers are under no obligation to offer a severance package, unless the employer has obligated itself via a contract.

Severance agreements often contain a number of compromises that will essentially call for the soon-to-be former employee to give up any claims that may exist in exchange for the benefits noted within the agreement. However, it is never a good idea to sign such an agreement without having the benefit of legal advice prior to signing.

Non-compete and severance agreements need to be legally sound and fair, and a skilled attorney can take the time to review the terms of those agreements to ensure that they are not unduly burdensome on the employee. If your employer expects you to sign a non-compete or severance agreement, contact the attorneys at Robert A. Klingler Co., L.P.A. first to discuss your rights under the law.

What Should An Employee Look For In A Severance Agreement Attorney?

Hiring a lawyer for a severance agreement helps an employee safeguard the agreements they enter, which may include extensive non-compete agreements, clawbacks on bonuses, and other unfavorable terms. When reviewing your agreement, look for the following:

How the Severance is Paid

Your severance pay may be the main reason for signing a contract with your employer. Inside of your agreement will be payment terms, which are either:

1. Lump-sum: A lump-sum payment is a one-time payment to an employee who leaves the company.
2. Installments: Payments in installments are the second option and provide steady income to you while seeking new employment. These payments may be made on the same schedule as your salary was paid when you were employed.

What benefits, if any, are attached to the severance agreement? You can negotiate benefits that may be available, such as:

• Job assistance
• Health insurance
• Life insurance

Receiving these benefits after you have been terminated can be very helpful in providing some stability while you look for new employment. However, in exchange for payment and continuation of benefits, severance agreements often include non disparagement clauses and require employees to give up their right to sue their employer for potential wrongdoings. Because of this, it is essential to have an experienced attorney review your severance agreement and explain all of the terms.

Ability to File for Unemployment or Be Rehired

Severance payments can impact your ability to receive unemployment payments from the state. If your package is higher than the maximum unemployment benefit rate, you will not qualify for unemployment. The Ohio Department of Job and Family Services (ODJFS) will determine if your severance payment qualifies as deductible income. Whether your payments are lump sum or installments can also impact your unemployment benefits. Your agreement should outline how the severance package will impact your unemployment.

Your severance agreement should include the circumstances in which you can be rehired by the employer

If you’re laid off, you can be rehired, and this information should be written into your agreement.

Retirement Plans or Stock Options

As part of your severance agreement, you may be able to maintain or acquire a vested interest in retirement accounts.

Vesting schedules vary, but typically, it occurs over a four-year period. If your termination date occurs before the next vesting period, you will not be entitled to stock options for work done prior to the vesting date.

Vacation Time

Unclaimed vacation time, PTO, or unreimbursed expenses may be claimed through a severance package.

Payment for unclaimed time off is paid in addition to the lump sum payout or installment. An experienced attorney can help make sure you receive all payments from your employer that you are entitled to in order to put you in the best position moving forward.

Sign-On Bonus Clawbacks

Some employers provide sign-on bonuses as part of their employment offers. Often, sign-on bonuses are subject to a clawback provision.

Clawback provisions outline what happens to the sign-on bonus if the employee resigns or is terminated within a certain period of time. The employee may be required to pay back the full amount or a pro-rata share of the bonus.

Unless the bonus clawback is explicitly addressed in the severance agreement, you will be obligated to pay back the bonus. Your attorney can help you negotiate the terms of your bonus clawback.

Why You Need An Ohio Severance Agreement Lawyer To Review and Negotiate the Terms of Your Package

Severance agreements can provide benefits and some financial security to employees who are terminated from their positions.

But like any other agreement in the business world, severance packages should benefit both parties.

To ensure your interests are protected, it’s important to consult with a severance agreement attorney to review and negotiate the terms of your package.

If your employer wants you to sign a severance agreement, contact us to schedule a consultation and discuss your options.