Connecticut businesses often have to let employees go. Such layoffs could arise through downsizing or even involuntary terminations. When these happen, a severance agreement is almost always involved. This is because contracts govern the Connecticut employment sphere. Therefore, Connecticut employees must understand severance agreements.
This knowledge is crucial because these contracts are susceptible to the usual dangers of contracts. For example, an unscrupulous employer could insert unfair severance clauses. That’s why you mustn’t sign a severance agreement without a Connecticut employment lawyer. An experienced lawyer would know what contracts would impede your career growth.
What Is a Severance Agreement?
A severance agreement is first a contract between an employer and an employee. It contains the compensation package an employee gets after their employment terminates. Notably, this compensation is called severance pay. Furthermore, a severance agreement will outline rights and responsibilities too.
This applies to the business owner and the employee. Importantly, severance contracts don’t just state an employee’s termination benefits. Instead, it also stipulates their qualifying conditions.
Why Do Employers Use Severance Agreements?
Connecticut severance packages are often mouth-watering. So, employees may start thinking that their employers are just looking out for them. However, this is rarely the case. Instead, companies usually use severance packages to protect themselves. The main reason for these agreements is to escape wrongful termination lawsuits.
Severance packages have become part of many company policies. Businesses also get other benefits from these contracts. For example, they:
- Create and sustain goodwill with sacked employees
- Protects company data and internal dealings
- Shows existing employees that the company respects and values them
Contents of a Severance Agreement
A typical severance contract has several standard sections. However, employers can also modify and include other provisions. Below, we list the relevant areas of a Connecticut severance contract.
- Reason for employee termination
- Employment timeline
- Severance pay provisions
- Health insurance (usually until the employee gets a new job)
- Liability release
- Return of any company property in employee’s possession
- Reference check or non-defamation provisions
- Confidentiality clause
- Non-compete clause
Understanding these crucial sections of a severance contract can be challenging. So, it’ll be best to pass them through an employment attorney. In addition, those clauses become binding once you sign them. Therefore, it’ll be careless to sign a severance contract you don’t fully understand.
Liability Release or Waiver
We already stated that employees often sign away their rights to sue their employers. Almost all severance agreements contain this clause. Indeed, Connecticut is an employment-at-will state. However, there are still conditions where termination is legally wrong. It may not even be the termination’s circumstances. Instead, it could be something the company did a long time ago.
This liability release protects:
- The remaining employees
- Company directors and executives
- Affiliated companies
- Shareholders
- Company subsidiaries
There’s also a wide range of wrongs this clause releases your employer from. They include:
- Wrongful termination
- Civil rights violations
- Workplace discrimination
General or Partial Waivers
Usually, employers ask for general waivers. This would exclude them from liability for everything they ever did wrong. Therefore, it’ll be best to consider every way a company has hurt you before agreeing to this clause. If you do, you may remember things you can’t forgive. Then you can negotiate for a partial waiver.
Can I Reject a Severance Agreement?
Yes, a severance agreement is a contract. Therefore, both parties must express full consent to validate the deal. Essentially, the severance package is an offer to the employee. Such an employee now has the right to accept or reject the offer. So, a worker can rescind a severance contract that’s not beneficial. This is often the case where an employer includes clauses that only help their company.
Similarly, Connecticut businesses aren’t under any obligation to offer severance packages. This is because severance pay isn’t a right in Connecticut. Since Connecticut is an employment-at-will state, business owners can fire employees without reason or notice. However, where an employer includes severance pay in the employment agreement, the contract binds them.
Connecticut Employment Lawyers Can Help You!
Are you facing employment termination in Connecticut? If you are, the issue of a severance agreement may have come up. Your employer may even discuss severance agreements at the start of your employment. Are you also an employer drafting severance agreements for your business?
Whichever the case, you need the best Connecticut employment lawyers. At Aeton Law Partners, our attorneys have extensive experience in Connecticut employment law. We serve both employers and employees too. If you hire us, we can draft an excellent severance contract. We can also prevent an employee from signing an unfavorable agreement. So, call us today for all severance contract discussions.