When preparing for the often difficult process of terminating one or several employees, having a top-notch severance agreement can save your company endless post-termination headaches and frustrating lost time and resources. There are many components of a well-crafted severance agreement, and one of the most important is intentional language which will minimize the possibility of post-termination suits due to claims that cannot legally be waived.
It is not lawful for a severance agreement to prevent employees from filing claims with the Equal Employment Opportunity Commission, or EEOC, or from participating in an investigation that the EEOC may bring against a company. However, it is possible to include language in the severance agreement that will disincentivize many employees from pursuing post-termination action through the EEOC. The agreement can stipulate that the employee is preemptively waiving one’s right to receive monetary compensation as a result of such a suit. While this does not completely do away with the possibility of a probe from the EEOC following an employee’s termination, it does significantly minimize the likelihood that an employee will pursue that course of action.
It is also possible to include language which expressly prohibits disparaging an employer. This language would need to be contextualized to make clear that it is not considered disparagement to give an agency such as the EEOC truthful information about an employee, or to truthfully respond to a subpoena. Obtaining an employee’s acknowledgement that he or she received proper and timely compensation during the term of employment will also deflate the likelihood of post-termination suits.
A well-crafted severance agreement is one of the most important tools at an employer’s disposal. A qualified law professional can help construct a severance agreement that is particular to your business and help avoid termination-related problems before they arise.