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Representing Employees

What If Your Employer Doesn’t Uphold Your Severance Agreement?

On Behalf of | Jan 13, 2022 | Employee Rights

Those who hold particularly skilled and educated positions can’t just jump from job to job. If you are an engineer or an executive, it could take months to find a new position with similar responsibilities and compensation when compared to your current job.

Many workers seek to protect themselves from financial hardship during career transitions by negotiating severance agreements with their employers. It’s easier to feel confident taking a new job or relocating to a new area when you know you will have some protection if things don’t go as planned.

If your employer included a severance agreement in their employment contract with you, you may have the right to expect paychecks for several months or a lump-sum payment after you leave. You may still qualify for certain benefits, like health insurance. What can you do if your employer refuses to follow through with your promised severance package?

Denying your severance may be a contract violation

Michigan has employment laws that make it an at-will employment state. You can leave your job at any time without any repercussions, and your employer can fire you for no cause or any cause that doesn’t violate your legal rights.

While terminating on its own isn’t a violation of your rights, failing to uphold a severance agreement might be. Your employer typically will still need to abide by the terms of the contract that they signed with you when you first took the job. Going back over your contract can help you verify that your employer’s actions are a violation of your agreement.

Sometimes, during a termination for cause or a layoff, clauses in your contract may allow your employer to cancel their severance obligations to you. If your contract does not extend any such loopholes to your employer, then you may need to take them to court. 

A judge could compel your employer to uphold the contract

Although it will probably take several months or longer to resolve, you can initiate a breach of contract lawsuit against your former employer. They may approach you to settle the matter outside of court once they realize what they stand to lose during litigation.

If they don’t offer a reasonable settlement, you can proceed to litigation. A judge can go over your employment contract and enter an order that helps to enforce it. Understanding your rights when dealing with a severance package disagreement with a former employer can lead to more successful negotiations.