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Losing your job may be unsettling, but a fair severance agreement can provide a measure of financial stability while you transition into a new position or retirement. Employers often take advantage of an employee’s urgency for income by requiring them to sign away their rights in exchange for any severance pay amount. If you sign a severance agreement without fully understanding all its provisions, you could forfeit significant compensation and have difficulty finding new employment.
We have over 75 years of collective experience fighting for workers’ rights. We possess a deep understanding of employment laws and how a severance agreement affects your future. Let our highly skilled, tenacious New Jersey severance lawyers review your severance agreement before you sign it. If you have already done so, we may still be able to help if your employer violated any laws.
Table of Contents
- Why Choose Joseph & Norinsberg for Your New Jersey Severance Case?
- Understanding New Jersey Severance Agreements
- Laws Governing Severance in New Jersey
- Legal Considerations and Pitfalls Associated with Severance Agreements in NJ
- Negotiating Severance Packages in New Jersey
- Legal Rights and Protections
- Schedule Your Free Consultation with a New Jersey Severance Lawyer Today
Why Choose Joseph & Norinsberg for Your New Jersey Severance Case?
We are a dedicated employment law firm fiercely committed to protecting the rights of New Jersey employees. If you have devoted your professional career to a company, you deserve fair treatment when it decides that it no longer needs your services. We are not intimidated by large, wealthy employers and know how to talk to them so they will listen.
Whether you need help negotiating a severance agreement or fighting for your post-agreement rights, our unsurpassed knowledge of state and federal employment laws can help protect your future and hold your employer accountable for not treating you fairly. Our attorneys have earned a five-star Google rating thanks to our relentless work ethic, exceptional trial skills, and empathy for every client.
We are proud of our five-star Google rating, not because of the number but because of the satisfied clients it represents. We treat all our clients like family, and they regularly stay in touch with us long after their cases are resolved. We regularly receive unsolicited client testimonials such as the following:
Our Clients Have Given Us a Five-Star Rating
We are proud of our five-star Google rating, not because of the number but because of the satisfied clients it represents. We treat all our clients like family, and they regularly stay in touch with us long after their cases are resolved. We regularly receive unsolicited client testimonials such as the following:
Our Case Results
Our firm represented a plaintiff who was a hedge fund executive who was terminated due to disability discrimination. After threatening to take the matter to arbitration, we negotiated a substantial increase in his severance offer.
Another client was denied overtime wages because her employer misclassified her job. We fought for her and secured a large severance package after threatening litigation.
Understanding New Jersey Severance Agreements
A severance agreement is a contract between an employee and an employer governing the terms of employment separation. They are often offered when termination of employment is involuntary but can be used when employment terminates for any reason. A severance agreement may include the following components:
- A lump sum or payments that will continue for a specified period.
- An agreement specifying whether your health insurance will continue and who will bear the cost
- The terms and conditions of transferring your retirement fund or continuing contributions
- A waiver of liability
An employer is not legally required to offer severance pay at termination unless the employer previously entered into a contract agreeing to provide it. Companies often offer severance pay to avoid a lawsuit. Known as a waiver of liability, it is just one example of the rights your employer may expect you to sign away when accepting a severance agreement.
Laws Governing Severance in New Jersey
According to the Equal Employment Opportunity Commission, an employer offering a severance pay arrangement in exchange for a liability waiver must offer something of value you were not already entitled to receive. For example, the waiver of liability would not be valid if the employer only offered you the pay you earned in exchange for the waiver of liability.
Additionally, the severance agreement language must be clear and unambiguous. If the average person in your position could not reasonably be expected to understand the agreement’s terms and conditions, it may be unenforceable. Our experienced New Jersey employment attorneys can determine whether your severance agreement is written in the appropriate language.
Special Federal Protections for Older Employees
- The agreement must be written in language the average person in a similar position would understand.
- The agreement must not prohibit a worker from suing based on a cause of action that may arise later.
- The employer must advise the worker in writing to consult an attorney before signing the agreement.
- When a single employee is terminated, the employer must give workers 21 days to sign the agreement.
- If the employer is terminating more than one employee, the employer must give each employee a full 45 days to sign the agreement.
- The agreement must allow an employee to revoke the agreement for at least seven days after signing.
- The employer must offer something of value in addition to the compensation the employee was already entitled to.
Protections for Employees with Discrimination Claims
If you have ever sued your employer or settled a claim for harassment, retaliation, or discrimination, your employer cannot add a non-disclosure provision to your contract that would bind you to confidentiality. According to § 10:5-12.8 of the New Jersey Civil Rights Code, such a provision violates public policy.
If severance is offered to resolve such a claim, the agreement must prominently state that any provision requiring confidentiality of the settlement is unenforceable if the employee publicly reveals enough details that make the employer reasonably identifiable.
Non-Compete Clauses
Non-compete clauses have long been a common mainstay in severance agreements. A non-compete agreement can prevent you from securing employment elsewhere in your field. On April 23, 2024, the Federal Trade Commission banned non-compete agreements. The final rule goes into effect September 4, 2024. After the effective date, existing non-compete agreements involving senior-level executives can remain in force, but non-compete agreements with other employees will no longer be enforceable.
Legal Considerations and Pitfalls Associated with Severance Agreements in NJ
Once you understand the fine print, a seemingly generous severance offer may not be so generous. Severance agreements may contain numerous provisions that can work against you, costing you far more than the seemingly generous severance pay your employer offers upfront.
Waiver of Liability
A waiver of liability is a promise not to sue in exchange for another benefit, such as severance pay. If you sign a severance agreement that includes a liability waiver, you could lose your right to sue even if you have a valid case for discrimination or other unfair treatment. Sometimes, the benefits offered in a severance package could be far lower than the compensation you might gain in a discrimination lawsuit against your employer.
Our employment law attorneys have extensive experience in wrongful termination and discrimination claims. We can determine whether your interests are better served by accepting a severance agreement or suing the employer. Often, we can use the possibility of a lawsuit as leverage to negotiate a generous severance package.
Non-Disclosure Agreements
Although non-compete agreements will soon be illegal, an employer can accomplish many of the same objectives using a non-disclosure agreement or NDA. An overly broad NDA could prevent you from using the skills and knowledge gained through experience with the terminating employer in your next job. While it may be reasonable for your employer to require you to keep protected trade secrets confidential, NDAs are often overly broad, making it difficult or impossible to procure new employment in your field.
Non-disclosure agreements are also unenforceable if they require you to cover up illegal conduct, prohibit you from reporting it, or bar you from participating in government investigations against the company.
Non-Disparagement Clauses
Besides a non-disclosure agreement, your employer may also include a non-disparagement clause, which generally prohibits employees from making public or private statements about the employer that could harm its reputation. Sometimes, workers are prohibited from even mentioning the agreement itself. However, non-disparagement clauses are often too broad and could violate your rights.
The National Labor Relations Board has found that non-disparagement clauses violate workers’ rights by failing to allow them to disclose poor working conditions or answer questions in investigations against the company. They also could prevent workers from defending themselves against allegations made by the company. As such, the National Labor Relations Board has banned non-disparagement clauses except those prohibiting workers from making malicious, false statements.
Inadequate Compensation
Being asked to sign away your right to litigation is no small request, and your severance pay should reflect this. And this is just one consideration. Your years of service to your employer and the value you have added to the company should play heavily into your severance package. We can calculate the value of your service to the company and determine a fair severance offer.
Severance Agreement Red Flags
If you notice any of the following red flags in a proposed settlement agreement, do not sign it until you consult with an experienced New Jersey severance attorney:
- Pressure to sign quickly
- Threats of retaliation if you consult an attorney
- Confusing language in the contract
- A lack of favorable terms for you
- A low compensation offer with stringent requirements to forfeit legal rights
- Language that makes you ineligible for unemployment benefits
- Language that requires you to pay back your severance pay if you violate the agreement
This is not an exhaustive list. If you see even one of these red flags or anything else that feels inappropriate in a severance agreement, our highly skilled employment attorneys are ready to go to bat for you and negotiate fair terms.
Negotiating Severance Packages in New Jersey
Your severance agreement’s terms are negotiable, despite what your employer may have told you. Your severance agreement should benefit you at least as much as it does your employer, and the financial compensation should only be a small part of your overall package. Our skilled attorneys at Joseph & Norinsberg can also negotiate numerous benefits for you in your severance package, as described below.
Health Insurance
Under COBRA, you are entitled to continue your health insurance for up to 18 months after employment ends, but you must pay your share and your employer’s. This can be cost-prohibitive. We may be able to negotiate a provision requiring your employer to continue paying its share of your health insurance premiums.
Additional Benefits
If you had voluntary deductions for other insurance programs, such as short-term disability insurance, your employer may be willing to extend your coverage temporarily until you secure new coverage through a future employer.
Your Retirement Fund
If you participated in a 401(k) plan and your employer matched funds, they may try to take back these funds if you were not fully vested. We can negotiate the best possible terms based on your situation.
Job Reference
Your severance agreement could include a clause requiring your employer to give you a neutral or positive job reference or a letter of recommendation upon request to prospective employers. It could prohibit the employer from making statements that hinder your ability to secure new employment.
Unemployment Benefits
New Jersey law allows you to receive unemployment benefits in addition to severance pay. However, some employers fight unemployment claims. It will be important to ensure none of the wording in your severance contract implies that your termination resulted from misconduct or voluntarily quitting, as these could disqualify you from unemployment benefits. Your agreement also could include a provision requiring the employer to cooperate if you apply for unemployment.
Fair and Reasonable Severance Pay
Your company may tell you that it is offering the maximum severance compensation available or claim that your severance pay is the standard amount. It may even claim that the offer is non-negotiable. However, when our knowledgeable and passionate New Jersey severance lawyers enter a severance negotiation, employers are often quick to loosen the purse strings and offer higher amounts. We have a 90 percent success rate in employment claims. When our New Jersey employment law firm represents you, employers would rather negotiate than go against us.
Legal Rights and Protections
When a sudden job loss puts you in a bad financial position, your employer has the upper hand in severance negotiations. They can play on your fears of getting nothing and may offer to do nothing to help you secure alternative employment. Additionally, the employer has superior knowledge of employment law and may assume that you have little or none. No matter what the employer tells you, you have the following rights when considering severance agreements:
- The right to take a reasonable amount of time to consider accepting the agreement, which extends to 21 days if you are over 40
- The right to take back the agreement for up to seven days if you are over 40
- The right to understand what you are signing
- The right to negotiate more favorable terms
- The right to fair compensation for signing away your rights on a severance agreement in addition to the compensation your employer already owes you
The right to consult with an attorney before signing the agreement
The liability waiver is unenforceable if your signature was not “knowing and voluntary.” A knowing and voluntary signature is one given after all the above conditions are met.
What If I Already Signed the Agreement and My Rights Were Violated?
If you have already signed a severance agreement and are having second thoughts, we can review it and determine whether it is enforceable. If not, we can help you negotiate a new agreement or file a lawsuit against the employer on your behalf.
Schedule Your Free Consultation with a New Jersey Severance Lawyer Today
If you are facing a sudden job loss and your employer has offered a severance agreement, DO NOT SIGN IT until you speak with one of our dedicated New Jersey severance lawyers. With more than 75 years of combined experience, our attorneys have extensive knowledge of the constantly evolving area of employment law. We understand how deeply a job loss can affect you and will relentlessly pursue the severance package you deserve. Contact us online or call us today at 212-227-5700 to schedule a free consultation.
Bennitta Joseph is an experienced New York City sexual assault attorney with over seventeen years of experience litigating cases involving workplace harassment. She takes on cases with uncompromising dedication, patience, and a relentless desire to achieve justice.
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