Category Archives: Releases

Separation Agreements and Releases

[Disclaimer:  This is one of my rare posts that talks about some heavy legal topics.  Remember that I’m not licensed, I’m not your attorney and nothing below is legal advice.  If you or someone you know is going through the stuff below, please contact an employment lawyer in your area for accurate and comprehensive legal advice!]

In this latest round of mass layoffs and terminations, we once again hear the rumblings of our old contract nemesis, the Separation Agreement and Release.

This is that document that the employer sticks in your face right after they’ve told you that you’re no longer working for them – and that they expect you to sign quickly or lose some types of benefits.  Apparently, Yahoo!’s instructions to get people to sign their Release has already found its way online [via Ask a Manager].  And even though we don’t see the language of the Release, even these bullet point slides aren’t exactly full of integrity.

So, what do you do if you’re going through something like this:

  1. Take a deep breath and relax.  It’s hard, I know (from experience).  But you have to be thinking clearly and not have an emotional response.  It’s what they’re counting on to get you to sign the document.
  2. Do NOT sign anything other than true exit paperwork at the moment of termination.  Read EVERYTHING!  The only thing you should be signing are documents saying that they provided you with certain copies of documents, certain pieces of information (ie: they told you when things had to be turned in for COBRA, etc).  Watch for anything that promises that you’ll take some form of action.
  3. In most states (check with an employment attorney to be sure what the rules are for your area), you have a certain number of days in which the employer MUST provide you so that you can get a Release or Separation Agreement reviewed by competent legal counsel.  In other words, they can’t force you to sign anything at the moment.
  4. Layoffs or terminations might immediately create BETTER circumstances for you on certain topics (such as the repayment of bonuses or relocation or education).  Don’t be swayed by veiled threats that you might have to repay something if you don’t sign the document.  In many cases, their election to end your employment also ends your obligation to repay (again, check with your attorney on this, and, again, it’s one of the reasons why you should still have kept copies of any prior contractual documents with your employer).
  5. In all, don’t panic.  In virtually all cases, you’re going to go through the five stages of grief.  NONE of these stages is a good time for you to be negotiating with someone else, especially as it concerns you.  Go home… take the rest of the day off.  Allow yourself a little time to emotionally recover.  Then start reading through the documents they gave you with a fine-toothed comb.  Contact legal counsel if you have complicating circumstances.
  6. Sign the Release once you fully understand the consequences of signature.  You might end up choosing to receive some sort of cash payout in lieu of something else (like the ability to sue later).  This is a business and legal decision that only you can make for yourself.  Run the numbers like you would any deal.  Approach it systematically and as impassionately as you can.  Ask for help.

Now, there are also a few things that I would watch out for in these types of agreements, too:

  • Any kind of forward-looking restriction on your ability to work somewhere else.
  • Read and re-read any claim release… especially if you’ve had or are having difficulties with an employment related legal issue with your company (again, call a local attorney for advice)
  • A restriction on your first-amendment rights to freedom of speech.  In most cases, you give up the ability to say negative things about your employer.
  • Changes to any pre-existing contracts you have with the employer.  They might try to entice you with a one-time cash payout.  Run the numbers (See #6 above) to see if it’s worth it to you.

Oh, and lastly, remember that you CAN negotiate Separation Agreements and Releases… but probably not with your immediate supervisior and not at the moment that they’re trying to walk you out of the building (see the Yahoo! stuff… they explicitly tell the supervisors not to negotiate).  Collect your things, gather the paperwork… and call their HR Department to arrange a face-to-face meeting in the immediate future BEFORE any deadline for signature arises.  Explain that you have some complicating circumstances that you’d like to address and clarify, so you’d like to talk with someone face-to-face about the Release before you sign.  If HR stonewalls you, call the Legal Department and ask for the Employment Law counsel on staff.  Explain the same thing to them and ask to meet with them.

I’m sorry if you have to go through this.  You are not alone.