Top 10 Myths About Severance Agreements in Minnesota

On Behalf of | Jul 14, 2023 | Severance Agreements

  1. There are laws surrounding when and how much severance to provide to an employee. There is no general law requiring that a company pay severance. Whether or not to pay severance to an individual terminating employment is up to the employer, however, most employers are willing to negotiate a severance package in many situations to avoid future claims.
  2. Severance packages are typically not negotiable. In fact, a severance package is virtually always negotiable- whether there will be one and the amount of severance and benefits provided. While the employer may not offer a severance package or does offer one and sets a deadline for signature, the employee typically has negotiating power by not resigning their position and acting quickly when the decision has been made to seek a severance agreement.
  3. Resignation from employment is necessary as a precursor to reaching a severance agreement.  The employee does not have to agree to resign immediately in exchange for a severance package- the employer will typically make resignation a condition of receiving the severance, but that is the time when must act to negotiate while resigning still provides leverage. Never resign without the advice of an attorney.
  4. It is false that severance pay depends only upon the number of months or years worked in employment. In fact, it can depend upon many factors, including the quality of past performance and dedication to the company. It can also reflect the employee’s willingness to provide benefits to the employer in conjunction with termination, such as non-disparagement provisions.
  5. Severance pay negotiation includes any pay and benefits owed to the employee to date. Instead, one  should first demand any and all salary and benefits earned prior to negotiating the severance package. There is no point in having to negotiate for salary and benefits one has already earned.
  6. The employer typically offers acceptance of a resignation as a favor to the employee.  This is not the case. The employer wants to preclude any possibility of a wrongful termination lawsuit and/or unemployment benefits.
  7. One cannot back out of a severance agreement once signed. There are provisions in the law that do allow one to withdraw their agreement in certain circumstances.

The above is general legal information and does not constitute legal advice. One should absolutely seek an attorney to review their facts and situation before taking any action or engaging on inaction.

I am Charles Goldstein, your advocate at work.

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