Severance Agreements in Texas
Often, when an employee is terminated, he or she will be asked to sign a severance agreement. Sometimes, an employer will offer severance because one of its written policies requires it to do so. For example, the employer may have a policy stating that whenever an employee leaves, he or she is entitled to X amount of severance for every year of service.
Severance agreements can be very simple — e.g., a simple exchange of money for a release of claims. But the fine print of a severance agreement can contain provisions which can be problematic for the employee on a going-forward basis.
Perhaps most importantly, severance agreements can contain nondisclosure, nonsolicitation and noncompete obligations that can hinder an individual’s ability to earn a living after termination. Agreements must be carefully reviewed to ensure that this is not the case.
Also, a severance agreement may be unfair, in the sense that it provides the employee with insufficient money to compensate him or her for unlawful discrimination. Although Texas is an “at-will” employment state, it still is unlawful to terminate someone due to race, age, disability, sex or national origin. It is also unlawful to retaliate against someone for filing a workers’ compensation claim, opposing unlawful harassment or opposing a failure to pay overtime that was owed. It is also unlawful to fire someone for refusing to commit an illegal act or for exercising FMLA. These are just some of the reasons that the termination may be unlawful.
All of these factors should be examined by an experienced labor and employment attorney. Robert Wood is Board-Certified in Labor and Employment Law by the Texas Board of Legal Specialization. He has reviewed many severance agreements. Contact Lindquist Wood Edwards LLP for the assistance you need.