Lawsuit Prevention Through Severance Packages

Severance package is a package comprised of different benefits, which is received by an employee when he/she leaves a certain company. Some of the benefits offered in this kind of package include references, outplacement services, insurance benefits, uncontested compensation for unemployment, and stock options.

Providing Severance Packages

In the whole Unites States, there is no law that binds or obliges employers to provide severance packages to their employees. If an employer chooses to provide this package to an employee who leaves the company, it is viewed or regarded as voluntary.

There are different reasons why an employee provides severance packages. Some of these reasons include the following:
• There is a promise written in the employee handbook or manual that employees will be provided with it

• An oral promise was given by the employer

• There is a written contract wherein it is stated the employee will receive it package from the employer.

• The company has a history of giving it to employees who leave a company

Severance Packages: Token for Lawsuit Prevention

Aside from the following reasons that are formerly mentioned, employers also provide a severance package to an employee because they want to avoid facing a lawsuit from that person.

This situation may arise when an employer ch0osees to fire his/her employee. There are instances wherein severance package is given to an employee in order to avoid being sued by him/her.

There are employers who give this to an employee in exchange of the latter’s act of signing a release. In making a legal agreement, an employer must remember and consider the following:

• The employee should receive something in return for his/her release- You must always bear in mind that you are requesting your employee to surrender or to waive his/her right to file a lawsuit against you. In return for the favor that the employee is going to do, you will have to provide him/her something that is extra, something that is not usually given.

• Provide the employee appropriate time to decide if he/she is going to sign- It is only just that you should give your employee an appropriate period of time wherein he/she will decide if he/she is going to surrender the right to file a lawsuit against you. You can even suggest to that employee that he/she can consult with his/her lawyer with regard to the agreement.

• Avoid giving any hint of coercion or forcefulness- Your employee’s decision to surrender or waive his/her right to sue you should be on his/her own and must be voluntary. If he/she is forced to do so, the courts will not enforce that certain release.

• Be sure that you are clear about the rights that your employee is going to waive- Your can inform that employee that he/she is going to surrender the right he/she has to sue you. Always make sure that the release is detailed and specific enough that it can prevent any kind of future claim that your employee has no knowledge about. In addition, it should also be complete enough to encompass every claim that the employee may possibly raise.

Importance of Receiving Severance Packages

Through the severance packages given to employees, they are given assistance during the period wherein they are looking for another job and another opportunity to enhance their skills. In addition, the benefits that are included in this package will aid them in their burden during this moment of transition in their lives.

By: Jan Camille Canivel

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To help you with severance package and other employment-related concerns, consult with our skilled Los Angeles employment attorneys. Feel free to visit our website and avail our free case analysis.