At the law office of Miller and Falkner, our employment law attorneys can assist and advise employees on a wide range of employment contract issues. Two common issues that arise in employment are noncompete agreements and severance agreements.
More and more employees are being presented with non-compete agreements when they are offered a position. Non-compete agreements generally prohibit an employee from working within a certain geographic area during a certain time. There are many aspects to handling non-compete agreements.
As a general principle a non- compete agreement has to be properly limited in geographical boundaries, and timeframe and it must protect a legitimate interest of the employer. Legitimate business interests include protecting confidential information and trade secrets, protecting the party’s relationship with its clients, and the money and time the employer spent training the employee. A non-compete agreement must be narrowly tailored to meet the needs of the employer, which will be balanced against those of the employee. The non-compete must not inflict undue hardship on the employee.
Once an employee leaves a business, there are several different ways that non-compete agreements can impact the employee. When the employee finds another job, that new job may violate the terms of the non-compete. If an employee takes a position which the former employer believes is in violation of the non-compete agreement, it may sue the employee seeking a court order to prevent the employee from working. A former employer must show that the employee has in fact taken or threatened to take an action in violation of the non-compete agreement. Other than an injunction, the employer can seek money damages such as lost profits.
The law office of Miller and Falkner frequently consults with clients when issues arise concerning a non-compete agreement. If you have a question regarding a non-compete agreement call us today to discuss your legal options.
Employers sometimes offer a severance package when the employment relationship ends. Severance agreements generally accompany any offer of severance pay. This agreement will require the employee to waive certain legal rights they may have in order to receive the compensation included in the severance package.
Severance agreements result from many different scenarios:
- An employer can offer a severance package to an employee they are terminating
- An employee can approach their employer and request a severance package after they have been terminated
- An employee wants to negotiate a severance package as part of their resignation
You should not automatically accept a severance package offered by your employer. Your severance agreement will likely require you to waive certain legal rights in exchange for the benefits offered in the severance agreement. If you were wrongfully terminated, for example if you were subjected to race discrimination, accepting a severance package will more than likely require you to waive your right to file suit based on that wrongful termination. Non-compete provisions (and many other provisions) are often included in severance agreements that may make it harder for you to obtain employment elsewhere. The amount of money offered in the severance package may not provide sufficient compensation for the rights waive or to overcome the obstacles the severance package creates.
A severance agreement must also comply with the Older Workers Benefit Protection Act (OWBPA). In order to have the employee successfully waive any potential age discrimination claims, this act requires that an employee get a minimum of 21 days to review the severance agreement before signing it and have at least seven days after signing it in which to revoke his or her signature. The OWBPA applies only to employees who are over 40.
Employees presented with severance agreements should schedule an appointment with an employment law attorney to not only review the agreement, but also discuss the facts surrounding the separation of the employment so that the attorney can determine if there are any potential claims you may have that would be waived by signing the severance agreement. The attorney will discuss with you the reason your employment ended, your area of employment and the possible repercussions this severance agreement could have on future employment, the reasonableness of the severance agreement and whether you have any potential claims regarding your employment that you would be waiving if you sign the severance agreement.
Aside from advising our clients as to the contents and possible ramifications of their proposed severance agreement, we can also negotiate the terms of the severance agreement. Many terms that can be negotiated in settlement agreements include:
- The Financial terms of the Agreement including: the amount of the severance, potential tax consequences of receiving a severance payment and the schedule of payments.
- Employment benefits including health insurance and retirement benefits
- Whether the employer will challenge the employee’s application for unemployment benefits
- Whether the employee will be eligible for re-hire at any future time
- The terms of any Non-competition agreement including its geographical boundaries, the time frame, and what constitutes competition
- Non-Solicitation of employees or former clients
- Applicable law
- What consequences are specified if either party breaches the severance agreement
The law office of Miller and Falkner frequently consults with clients when issues arise concerning a severance agreement. If you have a question regarding a severance agreement you are presented with or one you wish to request, call us today to discuss your legal options.