Severance Agreements 101: Drafting Enforceable Provisions to Mitigate Employer Risk

Susan Gross Sholinsky, Member of the Firm, co-presents "Severance Agreements 101: Drafting Enforceable Provisions to Mitigate Employer Risk," a webinar hosted by BARBRI.

Severance agreements—in which severance payments and other valuable benefits are offered as consideration in exchange for an employee's release of claims against the employer—are a valuable tool for employers to help mitigate the risk of future litigation. However, employment attorneys must understand what provisions should be included in the agreement and how to draft enforceable provisions, considering relevant federal, state, and local law requirements.

Many factors—both legal and situational—must be assessed before drafting even begins. These include jurisdictional considerations, the scope of the agreement (individual separation versus reduction in force), the employee's age, whether protective provisions are appropriate and allowable, special considerations for public employers, and any pending charges or legal proceedings.

When these variables are understood and it is time to draft, attorneys must avoid the pitfalls that can render an agreement unenforceable or—worse—lead to unintended consequences. While vetted templates can serve as a useful starting point for crafting a comprehensive and enforceable agreement, overreliance on preexisting language can lead to sloppy mistakes and overlook an ever-changing state law landscape. A severance agreement might include a release of claims, certain restrictive covenants, non-disparagement provisions, language addressing the return of company property, incorporation of other pertinent agreements (including equity agreements), and the amount of severance to be paid and the process for distribution.

For more information, visit the event web page.