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What is a Severance Agreement?

A severance agreement that includes a full release of claims is generally the only way an employer can be reasonably sure of avoiding litigation brought by a terminated employee.

Of course, peace of mind has a price.

In a Florida severance agreement, a dismissed employee agrees to accept value (“Consideration”) to which he is not otherwise entitled  in exchange for an agreement not to sue the employer.

Unfortunately, even terminations of employment that appear clearly rightful are not immune to suit. An employee determined enough to sue his former employer will often find a way to do so. The result, even if the company wins the suit, is costly litigation and a distraction from business operations.  In some instances companies are also susceptible to the “Bad Will” that may come with the public allegations in the suit. Risk factors of firing or laying off an employee may increase substantially in certain circumstances. Is the employee in a protected category under a discrimination law? Is the employee likely to be replaced by someone not in the same protected category? Has the employee recently engaged in protected activity such as taking leave under the Family and Medical Leave Act (FMLA), filing a workers’ compensation claim, organizing employees for a union, or blowing the whistle on her employer? Does an employment contract exist?

For these reasons, a severance agreement drafted by a Florida employment lawyer is an invaluable tool in the company toolbox. Savvy business leaders will have severance agreements drafted and ready so the severance agreement is available when it is needed.  Especially when complicating factors are present, a severance agreement with a full release of claims prepared by a Florida transactional law attorney can be an indispensible tool.

However, in Florida, for the severance agreement to be enforceable, the employee must be given a reasonable amount of time to consider executing. For example, to obtain an enforceable release of age discrimination claims under the Older Workers Benefit Protection Act (OWBPA), an employee must be given 21, or sometimes even 45, days to consider the agreement.

Does all this sound a bit daunting?

Don’t worry. We can help.

Our South Florida employment lawyers serve clients in Palm Beach County, Broward County, Miami Dade County, and throughout Florida.

We defend claims against employers for wrongful dismissal, as well as draft severance agreements that give Florida employers tools they need to manage their business with confidence.

If you need assistance with a wrongful dismissal claim in Florida, or have been served with a claim for breach of contract based on an employment agreement in Florida please contact us.  We can help.

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