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Representing Employees

Does your severance agreement meet EEOC standards?

When it comes to drafting a severance agreement, the Equal Employment Opportunity Commission has some standards a company must follow. If you are the departing employee, do you understand the agreement? Is the language clear?

Not always required

Many times, an employment agreement includes a severance agreement. The latter is not required, but the company you work for may still want to offer it. The severance agreement is a contract between you and your employer that places certain restrictions on your post-employment conduct in exchange for financial compensation or some other benefit.

A stickler for proper language

The Equal Employment Opportunity Commission expects employers to follow certain rules with respect to the language used in a severance agreement. The wording must be absolutely clear. If the language is “overly broad and misleading,” the contract will not be enforceable. In fact, special requirements exist for severance agreements prepared for departing employees aged 40 or older. In these documents, the wording must be thoroughly clear and understandable to the extent that complex sentences should not even be included. The writer must leave out legal jargon as well, and the content must include a recommendation for the recipient to consult an attorney before signing the agreement.

Liability concerns

The wording of the severance agreement may limit you from recovering damages under a charge of discrimination. However, according to EEOC rules, the severance agreement must not deny you your rights under Title VII; that is, the employer must not prevent you from filing discrimination charges against the company or from participating in such an investigation. Otherwise, the company could expose itself to liability. It could face liability not only because of the wording in your severance agreement, but also if the same language appeared in any previous severance agreements.

Seeking legal help

If you receive a severance agreement, the company must give you sufficient time to review it before signing. This is an opportunity for you to seek legal consultation to ensure the wording is clear, that the writer followed the EEOC guidelines properly and that your rights as a departing employee are firmly in place.