Through a thoughtful and collaborative approach to severance policy development, HR experts can take care of their outgoing employees while minimizing the company`s legal risk, helping to keep the peace for all. Rita Zeidner is the freelance author in Falls Church, Virginia. In principle, a termination agreement is a waiver or waiver of liability signed by the outgoing employee in order to protect the company from legal action. These agreements typically include compensation, outplacement services, and other benefits in exchange for the employee`s signature. For more information, see the dismissal agreement that SHRM makes available here. In Kruchowski v. Weyerhaeuser Co. (423 F.3d 1139 (10th Cir. In 2005) (Kruchowski I)) the 10th Circuit, however, found that the eligibility requirements to be specified related to the underlying termination decision and not to the person entitled to severance pay after termination. In this case, the factors considered by the employer in determining who would be fired were “the leadership, skills, technical skills and behaviour of each employee.” Since these criteria were not included in the unit of decision referral, the court found that releases against applications for age discrimination were ineffective. Employers should ensure that workers have time to consider whether to sign a redundancy agreement, a time frame that varies depending on the age of the workers. This particular legal requirement must be met to allow for the application of a release of rights from the Age Discrimination in Employment Act (ADEA), as amended by the Older Workers Benefit Protection Act (OWBPA).
Repeat and emphasize employee rights. The EEOC surprised many in 2012 by suing pharmaceutical giant CVS Caremark, arguing that the company`s firing agreement was too broad and that it had not clearly communicated that a former employee had the right to cooperate with state investigators. Although the severance pay policy contained standard language that expressly protected employees` right to sue for discrimination, the EEOC argued that the provision does not go far enough and called it “the only qualifying phrase that is not repeated anywhere else in the agreement.” Although the appeal was rejected on technical grounds, some experts believe that it is a sign of the times with regard to state control. This approach may seem like a time saver at first, but it can lead to lengthy litigation, a risk that will only increase given the current flood of legal challenges related to general declassifications, sometimes referred to as waivers. Since the courts are removing what was still the case in agreements a few years ago, employers should ensure that they are not using the same old termination agreements that the courts no longer allow. About one-third of employers who have severance pay set a minimum wage of two weeks. 20% offer at least one month`s salary. Source: WorldatWork, Severance and Control Plans (2014). If you decide to offer a deal, what should it say? Most lawyers say it should cover the following: A severance pay agreement — also known as a “separation agreement” or “termination agreement” — is a legal document between you, the employer, and the outgoing worker, which outlines all the specific conditions of the worker`s dismissal….