Separation agreement and release

[alex468]

What is the name of your state (only U.S. law)? Massachusetts

I was laid off yesterday. I was not wrongfully terminated. There was a stretch of time when there was very little work for me to do in my field, and I am grateful that my employment lasted as long as it did. I think my chances of being rehired by the same company are good, and I think my chances of being hired by a competitor are also good.

My issue is that the legal department at corporate HQ asked me to sign a separation agreement and release. The agreement offers me nothing other than what I am entitled to receive under law (final wages+accrued vacation payment). In return for nothing, it seems that I am expected to agree (among other insidious things) to:

1) waive my right to ever make any claim against the company regardless of what they may say about me or do to me in the future.
2) have any claim made by the company against me arbitrated by the company's selected arbitrator.
3) keep the agreement's existence in strict confidence (courts, immediate family, lawyer, and accountant excepted)

Part of my job involved creating a certain software tool. That tool is now the company's property, of course. However, the ability to create similar tools exists in my own head, and that ability makes me more marketable to the company's competition.

I am concerned that if I sign this agreement and develop a similar tool for my next employer (or for myself if I choose to begin a business), my previous employer will find out, their legal department will make a claim that the tool is their property, and they will force me to compensate them by taking me to arbitration in front of a paid-off, corrupt jackass.

Of course, if I don't sign, the only repercussion is that it may decrease the chances that I'm rehired.

Non-ranting questions:
1) Are separation agreements like this common these days? Are they legal in my state?
2) About how much does it cost for a company to take a previous employee to an arbitrator? I'd like to get a sense of how much (supposed) damage they would need to claim before it becomes worth their while.

Ranting questions:
1) When the hell and how the hell did American workers take so much power away from ourselves and our legal system and give it to colluding, corporate ****head legal departments?
2) What NGO can I support that is working to protect future workers from facing these decisions to give up all their rights just after being laid off?

 

[eerelations]

If the agreement reads as you describe, then signing it will not have any bearing on what you do/make for a future employer. The agreement is all about your employment with your now-former employer and whether you make any claims regarding that employment. The claims would be about things like your wages, whether you were illegally discriminated against or sexually harassed at work, and so on. If you don't plan to make any claims like this, then it doesn't matter if you sign the agreement or not.

And if they're not paying you to sign the agreement, the only reason you might consider doing so would be to remain on your former employer's rehire list. (Because if you don't sign, you can bet they'll take you off that list.)

While agreements of this type are very common, and have been for decades, it's still a good idea to run them by a competent attorney. I recommend you do so.

 

[alex468]

Does it seem unreasonable for me to worry about what's written in the document?

eerelations, I certainly understand that, from the employer's perspective, the most important part of the agreement is confirming that I have no claims against them. I have no claims based on anything that has occurred so far, and I think it's perfectly fair and reasonable for them to request a separation agreement from me where I attest to that fact.

But why include clauses that I will never file a lawsuit in the future? What if they violate my rights during my job search? And why include clauses that we must use their arbitrator if they make a claim against me? If the agreement were "all about" whether I make claims based upon my employment, then I don't understand why these clauses would be included.

But perhaps I am reading too much into this document. Thank you for your reply.

 

[cbg]

The language you are referring to is pretty much SOP boilerplate language.

 

[ecmst12]

If you are that concerned, take the document to a local attorney and pay him/her $100 or so to review and advise you on it.

 

[eerelations]

...But why include clauses that I will never file a lawsuit in the future? What if they violate my rights during my job search? And why include clauses that we must use their arbitrator if they make a claim against me? If the agreement were "all about" whether I make claims based upon my employment, then I don't understand why these clauses would be included.

But perhaps I am reading too much into this document. Thank you for your reply.

You are reading too much into the document. As others have pointed out, clauses like this are standard, normal, and very common. I'd be surprised if there weren't any clauses like this in this document.

But I'm curious about something...if they aren't paying you to sign it (given that it's standard, normal and very common for employers to pay people to sign documents like this), why are you even considering it? If it's because of some vague possibility of future employment with this organization, well, for me anyway, that just wouldn't be good enough. I would insist on a written guarantee of future employment in return for signing the document, and if they refused, I'd counter with a request for a written guarantee of positive references to my future prospective employers. And if they balked at that, well, I'd just walk away (without signing, of course).

 

[Beth3]

Ranting questions:
1) When the hell and how the hell did American workers take so much power away from ourselves and our legal system and give it to colluding, corporate ****head legal departments?
2) What NGO can I support that is working to protect future workers from facing these decisions to give up all their rights just after being laid off?

Calm down. You do not have to sign this document and since your employer isn't offering any severance, you have no reason to do so. Since they're not offering you any consideration beyond that which you are already legally entitled, if you do sign the document I doubt it's even enforceable.

Tell your employer (nicely) that if they wish you to sign the waiver, they need to provide you with some basis to do so, such as a reasonable amount of severance. If there is language that you're concerned about, then discuss that with them as well.

If they don't come back with a sufficient offer of severance, then just throw the agreement away.

 

[cbg]

You are taking this much too personally. First, as others have said, you do not have to sign it and have no reason to do so.

But this is not something that the company thought up specifically to prevent YOU from filing a lawsuit that you would justly have won. This is standard boilerplate language that appears in just about every separation agreement ever produced anywhere in the US. You must admit, it would be a bit much to expect that you should be granted severance pay (I'm talking generally, not specifically, here) and then be allowed to turn around and sue the company. One or another, sure, but both? That's asking a lot.

In your case, since you are not being offered severance, you have no reason to sign. You do not have to and the company cannot take any legal action against you for not doing so. You can throw it in the shredder and that's the end of it. On the other hand, since by your own admission you have no basis for suit, I'm a little confused as to why you're so concerned about not being able to file a suit in future. If you're talking about being able to file a suit, sometime in future, for something they haven't done yet, I can pretty much guarantee you that in MA, any agreement you sign NOW that says you won't sue them for something that hasn't even happened yet won't be enforced by the courts. And if it's for something that HAS already happened, if you don't see a basis for suit now, it's not likely that you'll have a basis for suit later. You say yourself that your chances of rehire or good. So you'll have to forgive me for thinking that perhaps you are mixing mountains with molehills.

 

[alex468]

Thanks to everyone for your considered replies

In retrospect, I was not thinking clearly the day after my layoff when I examined the agreement and wrote my original post. After reading some of your rational and reasonable replies, I realized that my emotions may have been messing with my head, and I put the agreement off to the side and didn't think about it or your replies for a few days.

When I returned to the agreement, I saw that I had misunderstood something rather important! What I thought was a statement of value about the funds I'd be receiving from final wages+unused vacation time was actually a value for severance pay. I've signed the agreement and received the severance.

Thanks again.