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Severance agreements carry more explicit terms

Ever since the #MeToo movement became a household phrase following the Harvey Weinstein allegations, companies of all kinds have been reevaluating the terms of their severance agreements. It is a testimony to modern corporate life that many severance agreements now contain explicit language based on a company’s new code of conduct—but in some, the language is still unclear.

Backing up words

Many companies believe they should not underestimate the power of the #MeToo movement, so they put more teeth into their employment contracts and severance agreements. However, some companies do not go far enough in that they fail to update their code of conduct, which usually appears in an employee handbook or manual.

Background checks

A male executive about to join a company may go through questioning about his past, and certainly a background check. The new company may want to know if the potential employee was ever charged with harassment or found guilty of sexual misbehavior at a former company. The candidate may not be comfortable with either the interrogation or the wording in an employment contract, especially if the terms surrounding the possibility of termination appear to be fuzzy. Some negotiating may be in order, and even if the language is not as clear as he would like, the candidate may sign because the salary and benefits package might be too good to pass up.

Termination may happen

A highly-paid executive on his way out the door has a right to expect the terms of a severance agreement to be explicit with language that is straight-forward and crystal clear. However, considering the power of the #MeToo movement, if the language in the severance agreement lacks clarity, or if clear language addressing employee misconduct does not appear in the company’s overall code of conduct, the executive may have grounds for contesting his termination. To keep that from happening, the employer should not hesitate to request a legal review of company documents, with special emphasis directed toward the wording of employment and severance agreements.

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