Severance Agreements

Highly Skilled Bergen County Employment Lawyers Serving Workers Throughout North Jersey

Severance pay is money an employer offers an employee who has been terminated to ease the transition between jobs. While some companies present these payments as a generous gesture, severance usually is tied to a legal document that waives your right to sue, limits what you can say about the employer, or imposes restrictive covenants such as non-compete or non-solicitation clauses. Knowing what you are signing—and what you might still be able to negotiate—can be essential. At Rabner Baumgart Ben-Asher & Nirenberg, P.C., our team of Bergen County severance agreement lawyers helps employees throughout North Jersey review, improve, and enforce severance packages.

Am I Legally Entitled to Severance?

New Jersey law does not require a company to maintain a severance plan. However, three situations can create a legal right to severance payments:

1. A written policy or plan – If your employer has an established severance policy, it must follow that policy for every employee who meets the stated requirements. Failing to do so can create a breach-of-contract or ERISA claim.
2. Individual employment contract – Executives, managers, and key sales employees, among others, often negotiate severance clauses when they are hired or promoted. Once severance language is in your contract, the employer is bound to honor it.
3. The New Jersey WARN Act – For employees who lose their jobs in certain mass layoffs, plant closings, and transfers of operations, the NJ WARN Act requires employers to provide 90 days’ notice and at least one week of severance pay for each full year of service. Employers that fail to give adequate notice must pay employees an extra four weeks of salary.

Outside of these contexts, severance pay generally is discretionary. Yet companies frequently offer packages to reduce the litigation risk, protect trade secrets, or enter into a non-disclosure agreement. Understanding your employer’s motives for offering severance pay and determining whether you have a discrimination, harassment or retaliation claim can help you determine what leverage you have.

Typical Eligibility Criteria

Severance plans vary, but they often require employees to meet certain criteria, which may include:

• A minimum length of service (often one to three years).
• Termination “without cause” or due to position elimination.
• Staying through a transition period, merger, or project completion.
• Signing a separation agreement that waives legal claims and agrees to confidentiality and non-disparagement terms.

Because every plan is different, it is important to have an experienced Bergen County employment law attorney review your severance agreement.

Key Clauses to Watch in a Severance Agreement

Before you sign any contract or severance agreement, it is crucial to understand exactly what rights you may be giving up—and what obligations you might be taking on. Here are common provisions in a severance agreement that deserve your close attention.

• Release of claims – Most agreements ask you to waive rights under the New Jersey Law Against Discrimination (NJLAD), Conscientious Employee Protection Act (CEPA), and other employment laws. Make sure you understand the value of the claims you are giving up.
• Confidentiality and non-disparagement – Broad language might prevent you from discussing workplace harassment or pay inequity. New Jersey recently restricted non-disparagement terms that silence discrimination complaints, so overly sweeping language might be unenforceable.
• Restrictive covenants – A non-compete or customer non-solicitation clause could hinder your ability to earn a living after you leave the position. The length of time, geographic reach, and scope of the restricted activity should be reasonable.
• Payment structure – While payments over time are common, a lump-sum payment offers immediate cash and reduces the risk of the employer stalling future installments.
• Continuing benefits – Health insurance subsidies and accelerated vesting of stock options sometimes can be added.

How Much Severance Is Typical?

Many employers use a formula such as one or two weeks of pay per completed year of service, though some cap the total bonus for long-time employees or include a minimum for newer employees. Other businesses make case-by-case offers. If peers who lost their jobs received more favorable packages, you may have room to ask for additional pay or other perks.

Negotiating a Better Package

You often can negotiate a more favorable severance agreement; however, you have the most leverage before you sign. At Rabner Baumgart Ben-Asher & Nirenberg, P.C., we routinely represent employees in severance negotiations, which include:

• Calculating the value of potential legal claims to show why the current offer is inadequate.
• Pressing for higher cash payments, accelerated vesting, or employer-paid COBRA premiums.
• Reducing or eliminating non-compete restrictions or narrowing them to protect the client’s future career.
• Ensuring neutral job references so management cannot make it more difficult for you to find your next job.

When the Employer Offers Nothing

Even if no severance is on the table, you still might secure a payout by presenting evidence of discrimination, retaliation, unpaid wages, or a whistleblower claim. Employers often pay to settle a legal claim and avoid litigation costs and reputational harm. As Bergen County severance agreement lawyers, we evaluate your potential legal claims, and are available to meet with you, draft a demand letter, and open negotiations on your behalf.

Are You Ready to Protect Your Future Earnings?

Your next career move should not be hamstrung by a one-sided separation agreement. Rabner Baumgart Ben-Asher & Nirenberg, P.C. has guided employees across Bergen County and throughout greater North Jersey through hundreds of severance reviews and negotiations. We know what terms local employers commonly offer—and how much better our clients often can do. Before you sign away your rights, let us help you secure the best possible deal. Call 201-777-2250 or reach out online to schedule a confidential consultation with an experienced Bergen County severance agreement lawyer.