A severance agreement is a contract between an employer and employee documenting the rights and responsibilities of both parties in the event of job termination. The contract specifies any severance package of pay benefits and the conditions under which it will be provided or withheld. Severance agreements specify what will be provided, as well as terms and conditions under which the employee might forfeit some or all his rights. Money and benefits in a severance package might include, pay in lieu of notice, pay based on a term of employment or the expected period of unemployment, an extension of medical and dental benefits for a specified time period, or Stock options. A voluntary severance package may be offered as an incentive to an employee to resign or retire. If severance is offered, make sure an attorney reviews the agreement. You may be giving up rights you have not considered or may be agreeing to something that will cost you more than the amount of severance. Do you a non-compete agreement? These provisions may limit your ability to get a new job? There are several key legal and economic issues that can be evaluated by an attorney to help ensure you have a reasonable severance package.
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