Severance Agreements

New York City Attorney Experienced in Employment Litigation

In New York and New Jersey, most employment is at-will. This means that an employee may be fired for an arbitrary reason or laid off for no reason. However, an employer may not break the law in terminating employment, such as by firing someone for a discriminatory or retaliatory reason. In New York City and elsewhere, some companies ask employees to sign severance agreements that entitle the employee to various benefits in exchange for waiving the right to sue for violations of workplace rights. Executives and other employees should carefully evaluate these agreements with the help of a discrimination attorney. Emre Polat is an experienced New York City severance agreement lawyer who has counseled and represented both employees and employers in litigation.

Severance Agreements

Most employment is at-will, and unless it was negotiated as part of the employee’s employment agreement, an employee is not entitled to severance. In some cases, an employee negotiates to get severance after a certain period of employment or when termination happens under certain specified circumstances. When an employer has a policy about making a payment when terminating an employee, there may be an implied contractual right to severance. Generally, however, there are circumstances under which it is wise for an employer to offer severance through a severance agreement when terminating an employee.

Severance usually is not paid after a resignation, instead being paid to an employee who has been fired or laid off. Sometimes, there is “cause” to fire an employee, and in those cases, even if there has been an agreement or policy creating an implied right to severance, the employer may not need to pay. “Cause” is usually a situation involving gross negligence, damage to the company’s reputation, or a criminal conviction.

In many cases, severance is offered so that an employer may avoid a discrimination or retaliation lawsuit. Severance agreements usually include a waiver of the employee’s right to sue the employer and may be offered by an employer specifically to avoid a discrimination or retaliation claim. A severance agreement attorney can advise New York City residents on whether they should accept the agreement in these circumstances.

In some situations, the amount of severance being offered in exchange for a waiver of the right to sue is not sufficient to compensate for the loss of the right to sue. For example, if a supervisor fails to promote a 60-year-old employee because they want “fresh faces,” and then they lay off the employee and several other older workers, it is possible that the employee has an age discrimination claim under the ADEA. Similarly, if a manager lays off all Muslim workers for asking for a religious accommodation because they do not fit the company culture, those workers may have a religious discrimination claim under Title VII or state law.

Employees who bring discrimination claims under the ADEA, Title VII, or other federal anti-discrimination laws may be able to recover back pay and compensatory damages, including emotional distress and pain and suffering. However, there are caps on compensatory damages awarded under federal anti-discrimination laws, and these are based on how large the employer is. When a company has more than 500 employees, for example, the cap on compensatory damages is $300,000. There are no caps on compensatory damages in lawsuits based on state anti-discrimination laws, such as the New Jersey Law Against Discrimination.

When looking at a severance package and whether it is worth it to settle, an experienced attorney will look at whether you would have a strong lawsuit. When there is direct or strong circumstantial evidence of discrimination, the amount being offered as severance may not be sufficient. Each case is unique and should be considered on a case-by-case basis.

Contact a New York City Lawyer Regarding a Severance Agreement

Severance agreements may need to be negotiated or litigated. A skilled New York City severance agreement attorney can make sure that your rights are protected. Emre Polat is a rising star in New York and New Jersey who has worked as a litigator for both a plaintiff’s firm and a defense firm. He represents clients in Manhattan, Brooklyn, Queens, the Bronx, and Staten Island, as well as in Nassau, Suffolk, and Westchester Counties and in New Jersey. Call us at (212) 480-4500 or use our online form to set up an appointment with a wrongful termination lawyer or seek assistance with another employment dispute.