Negotiating Severance Agreements: Tips for Florida Employees
While Florida law does not require employers to offer employees any particular severance pay upon termination of the employment relationship, many employers offer severance or separation pay anyways, typically in exchange for a release of potential legal claims that the employee may have, or to enforce a non-compete agreement. Severance may also be part of an employment contract or a policy provided in a Handbook. Severance agreements are legally enforceable contracts in Florida, provided the employee enters into them knowingly and voluntarily. We explore here questions about negotiating the severance as offered.
If you are the employee who is offered a severance agreement, how you approach potential negotiations (and whether you accept the agreement “as is”) all needs to be carefully considered . Employers rarely offer severance pay without strings attached. In general, most severance agreements contain a release on behalf of the employee and in favor of the employer – likely, with this release, you are signing away your right to sue for the employer for any wrong it may have committed in connection with your tenure or termination. Reversing that release may be difficult, if not impossible, depending on the circumstances of how it was presented. So, if you believe you have been let go illegally or wrongfully (like because of discrimination, a complaint, etc), it is imperative you discuss your situation with an employment attorney before signing any severance or release.
Keep in mind, an employer can typically only enforce a severance agreement which offers consideration beyond what you are already entitled to under the law. In other words, if your employer demands you sign a separation agreement in exchange for receiving your final paycheck, this may be illegal. Conversely, a severance agreement which provides you an extra week of pay is likely enforceable.
As with any contract, you may be able to negotiate severance agreement’s terms. However, if you intend on negotiating, you should do so with caution. Any negotiations you attempt can be deemed rejection of the offer and may result in the severance being withdrawn all together. Therefore, the way you approach negotiations (and how you negotiate) are important. If you are unsure about how to negotiate, what to ask for, or how to ask, it is best to consult with an experienced Florida employment attorney to guide you before you agree to accept or negotiate your contract.
If you do opt to negotiate on your own, or want to review your agreement to make sure it contains terms that may also protect you, you may consider the following:
- Mutual General Release
- This means that the company releases you from any potential claims it may have against you, as well as you releasing the company from any potential claims (known or unknown) you have against the company.
- Mutual Non-Disparagement
- Typically, Severance provides that you cannot say anything bad (“disparage”) the company. You may consider requesting that this is mutual – to ensure that the company engages in good behavior towards you.
- Neutral Reference
- Nowadays, neutral references have become more popular than a “positive” reference and ensure that the company will only provide your dates of employment and position to future employers/third party inquiries.
- Reference Letter
- You may consider requesting that the company provide you a reference letter, which states your position, dates of employment, and that it wishes you luck in future endeavors.
- Resignation in Lieu of Termination
- Some companies may agree to a provision allowing you to resign in lieu of termination. However, exercise caution with this. A voluntary resignation can result in loss of entitlement to unemployment benefits. However, and typically, the Department of Economic Opportunity (the Florida unemployment office) will treat a resignation in lieu of termination as a involuntary separation and provide for entitlement to benefits.
These non-monetary terms are in addition to monetary compensation (if you opt to negotiate), such as extra pay or continuation of health benefits (or payment of equivalent).
What Employers May Seek From You
Beyond a release of legal claims, many Florida employers seek additional things from former employees such as confidentiality and non-compete restrictions. Confidentiality provisions run the gamut, from a general agreement not to divulge “proprietary” information to not publicly disclosing any information about your employment or the company.
You need to be extremely careful when considering a confidentiality agreement, as it can significantly restrict your post-employment rights. For instance, if you agree to a confidentiality agreement with a broadly worded “non-disparagement” clause, you might be held in breach of contract if you subsequently criticize your former boss on social media or even to a friend.
Likewise, a non-compete agreement may not seem like a big deal, but it can significantly restrict your ability to earn a living after you leave the employer. Non-Compete provisions can be enforceable under Florida law, with the right language. If your employer insists on a non-compete provision as a condition of severance, you may consider negotiating a specific time limit and geographic scope. Florida law generally requires that non-compete and non-solicitation agreements are narrowly tailored, not overbroad in geographic scope and typically two years in duration (or less)
Taking Severance Negotiations Seriously
If you need advice or assistance on how to successfully negotiate a severance agreement with your current employer, you should consult with an experienced Florida employment law attorney.