To Sign or Not to Sign (That Severance Agreement)? That is the Question

Posted on August 17, 2018 by Shannon L. Trivett

Although Washington employers are generally not required to provide severance pay to a terminated employee (except if promised in an employee handbook or employment contract), many employers still offer severance as a gesture of good will. There are any several factors, however, that should be considered when deciding whether to sign a severance agreement.

An employee who is offered a severance package is often asked to release any and all claims the employee may have against the employer (including claims for unpaid wages, wrongful termination, and/or discrimination), in exchange for severance. Depending on the circumstances, this can turn out to be an unfair trade, especially if there are questionable circumstances surrounding the employee’s termination. On the other hand, the employee may prefer receiving a definite amount of money now, rather than taking on the risk and delay of litigating a possible claim.   However, even if an employee chooses not to pursue a legal claim against the employer, facts supporting a legal claim can still be used as leverage in negotiating more severance for the employee.  Whether an employee should refuse severance and pursue an employment claim should depend on an assessment by a knowledgeable employment attorney.

In any case, an employee should not to sign a severance agreement immediately after receiving it. Rather, the employee should request time and an opportunity to consult with an attorney to review the employee’s options. Under federal law, any employee over the age of 40 is entitled to a minimum of 21 days before being required to sign any severance agreement.

If you have recently been offered a severance agreement and have questions about your rights and obligations, you may benefit from consulting with an employment attorney before signing on the dotted line. The labor and employment attorneys at Lasher Holzapfel Sperry & Ebberson are happy to consult with you regarding your specific situation.