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Legal Pitfalls for Employment Separation Agreement

By Edited Feb 10, 2014 0 0

If your company is experiencing financial hardship and the management has already informed you of a possible lay off, you may still secure your financial status. Prepare for that day by doing the following:

1. Review your employment contract. Check stipulations on separation or severance pay.

2. Read the company manual again and check provisions for lay off.

3. Verify your employment position/title/ salary rate and status. Ask the Human Resource Manager on your real employment status and see if it has no discrepancy with the employment contract.

4. Anticipate that the layoff can happen anytime so keep your employment documents handy.

5. If the employer will provide a separation/ severance pay, educate yourself with these legal requirements. These will affect the validity of the Employment Separation Agreement, and may provide you with an opportunity to file a lawsuit.

Vital elements for separation agreement to avoid legal pitfalls:

1. Consent- The employer or the Human Resource (HR) manager must inform the employee of the contents of the separation agreement and the waiver. Failure to do so will invalidate the agreement, even if the employee has already signed it.

The waiver states that the employee renounces his/her right to sue upon receiving the separation pay or severance package. The HR must explain its consequences and give the employee a chance to either accept or reject the waiver.

The employee must read all of the conditions and determine if the amount is fair. The agreement and waiver must not contain any breach or violation against the employment contract, company manual, and existing government laws.

If you are certain and have adequate evidence for a breach or violation committed by the company, and the amount offered is not fair; you may refuse signing the waiver along with the severance agreement.

Remember that you can file a lawsuit to assert fair employment practices and compensation.

2. Consideration- The separation agreement must contain provision for additional compensation on top of what the employee is already receiving. This is in exchange for having the employee promise not to compete against the employer, disclose trade secrets, or file a lawsuit. It may include extension for health coverage, payment of accrued leave, back pay, and other benefits.

If the employer has provided reasonable compensation and benefits, and no legal violation has been committed by both parties, the employee may consider this as a fair deal.

3. Voluntary act- It must specify that the employee was not forced or intimidated in any way upon signing the Employment Separation Agreement.

Consult a Labor andEmployment Law Attorney in Los Angeles to help you file a lawsuit.


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