employer not honoring severance agreement

2 min read 30-11-2024

employer not honoring severance agreement

Losing your job is stressful enough. When an employer fails to honor a severance agreement, it adds insult to injury. This article outlines what to do if your employer isn't paying the severance they promised. Understanding your rights and options is crucial to getting what you're owed.

Understanding Your Severance Agreement

Before taking action, carefully review your severance agreement. This legally binding document details the terms of your separation, including the amount of severance pay, payment schedule, and any conditions for receiving it. Look for clauses regarding:

Payment Schedule: Does the agreement specify a single lump sum payment or installments?
Conditions: Are there any conditions you must meet to receive the severance (e.g., signing a release, non-compete agreement)?
Dispute Resolution: Does the agreement outline a process for resolving disputes? This might include mediation or arbitration.

Pro Tip: If you're unsure about any clause in the agreement, consult with an employment lawyer before signing.

What to Do If Your Employer Breaches the Agreement

If your employer isn't honoring the severance agreement, here's a step-by-step approach:

1. Gather Your Evidence

Collect all relevant documentation, including:

Your Severance Agreement: A signed copy is crucial.
Employment Contract: This might contain relevant clauses related to termination.
Emails and Correspondence: Any communication with your employer regarding severance.
Payroll Records: Showing your last paycheck and any missing severance payments.
Witness Testimony: If applicable, gather statements from colleagues who witnessed the agreement's creation or discussion.

2. Communicate with Your Employer

Start by contacting the HR department or the person who handled your severance. Clearly and professionally explain the discrepancy. Keep a record of all communication, including dates, times, and the content of each conversation. Send follow-up emails summarizing your conversations.

3. Formal Demand Letter

If informal communication fails, send a formal demand letter (ideally from your lawyer). This letter should clearly state the breach of contract, the amount owed, and a deadline for payment. Keep a copy of the letter and proof of delivery (certified mail with return receipt).

4. Mediation or Arbitration

Your severance agreement may include a mediation or arbitration clause. This process allows a neutral third party to help resolve the dispute. It can be less expensive and time-consuming than litigation.

5. Legal Action

If all else fails, you may need to file a lawsuit against your employer to recover the unpaid severance. This is a more expensive and time-consuming option but may be necessary to ensure you receive what you're owed.

Potential Legal Claims

Depending on your situation, you might be able to pursue various legal claims, including:

Breach of Contract: This is the most straightforward claim if you have a written severance agreement.
Wrongful Termination: If your termination was unlawful (e.g., based on discrimination or retaliation), you could have additional claims beyond severance.
Wage Claim: Unpaid wages, including severance, often fall under state and federal wage laws.

Finding Legal Assistance

Navigating employment law can be complex. Consulting with an employment lawyer is crucial, especially if your employer refuses to comply. They can advise you on your legal options, help you gather evidence, and represent you in negotiations or litigation.

Disclaimer: This article provides general information and should not be considered legal advice. It's essential to consult with a qualified employment attorney in your jurisdiction to address your specific circumstances.