Long gone are the days when most employees began their careers with and retired from the same employer. These days, roughly 2.5% of workers in this country will switch jobs every month in pursuit of better wages, better working conditions or more fulfilling work.
As job changes have become more common, even among executive-level employees, it has become increasingly important to examine employment contracts carefully, particularly in regard to separation agreements.
A separation agreement (which is also sometimes called a “termination” or “severance” agreement) typically covers everything from severance pay and benefits to confidentiality agreements and references for future employers.
Why it’s important to negotiate separation agreements
Negotiating these terms at the beginning of employment can help create an amicable end point because they offer protection against uncertainty. It’s critical for any employee to have a safety net in place if their employment suddenly ends because a project is canceled, a merger takes place, you’re suddenly deemed a “poor fit” for the company culture or any other unexpected reason. With the right agreement, you can:
- Secure enough severance pay to support you while you go through the sometimes lengthy process of securing a new position at a comparable level
- Arrange for the continuation of important benefits for a period after the employment ends, such as health insurance and life insurance, at an affordable cost
- Protect your professional reputation by limiting what your former employer can say about you through non-disparagement clauses
When a company is “courting” you, you have a lot more leverage than you would during a termination, so these are not conversations you want to leave until you already have one foot out the door. Legal guidance can help you negotiate the best possible employment contract – and avoid legal disputes down the line.