Houston, Texas Severance Agreements Attorney

A severance agreement in Houston, Texas, is a legally binding contract between an employer and an employee that outlines the terms and conditions under which the employment relationship will end. These agreements typically come into play during situations such as layoffs, company restructurings, or voluntary separations when an employee leaves the company. 

Severance agreements can vary widely in their terms and provisions. Still, they generally provide specific benefits or compensation to the departing employee in exchange for their agreement not to sue the employer or disclose sensitive company information.

Understanding the critical components of a severance agreement is important not only for financial reasons, but also to protect your rights and future prospects:

Severance Pay

The agreement may specify the amount of money the departing employee will receive as a severance payment. This payment is often based on factors such as the employee’s years of service, position, and salary.

Benefits Continuation

The agreement might outline whether the employee’s health insurance, retirement contributions, or other benefits will continue for a certain period after their departure.

Non-Disparagement Clause

This clause prohibits the employer and the employee from making negative statements about each other. It helps maintain a positive public image for both parties.

Confidentiality

Employees may be required to maintain the confidentiality of specific company information even after departure.

Release of Claims

The employee typically agrees to release the employer from any potential legal claims related to their employment, such as wrongful termination or discrimination.

Non-Compete and Non-Solicitation Clauses

These clauses might restrict the employee from competing with the employer or soliciting the employer’s clients or employees for a certain period after leaving.

Return of Company Property

The agreement may outline the process for returning company property, such as laptops or access badges.

Consider seeking legal advice from our severance agreements in Houston, TX, when negotiating or drafting a severance agreement to ensure that it complies with local laws and protects your rights and interests.

The following factors come into play when negotiating the terms of your severance agreement in Houston, TX:

Employment Status: Whether you are being laid off, terminated, or voluntarily leaving can impact the negotiation process. 

Length of Service: Your years of service with the company can influence the severance pay you are eligible for. 

Job Role and Level: The significance of your role within the company and your position’s level of responsibility can impact the negotiation. 

Company Policy: Some companies have established severance policies that outline the terms for all departing employees. 

Industry Norms: Research what is typical in your industry for severance packages. This can provide a benchmark and help you determine reasonable negotiation points.

Legal Compliance: Employers must often adhere to labor laws and regulations when crafting severance agreements. Understanding your rights and the legal requirements can give you leverage during negotiations.

Performance and Contributions: Your performance record and contributions to the company may be considered when negotiating. 

Pending Legal Claim: If you have potential legal claims against the company (e.g., discrimination or wrongful termination), this can influence negotiations. 

Non-Compete and Non-Solicitation Agreements: If your severance package includes non-compete or non-solicitation clauses, these restrictions may impact your ability to find new employment. 

Benefits Continuation: Negotiating the continuation of specific benefits, such as health insurance or retirement contributions, can significantly impact the overall value of your severance package.

Market Conditions: Economic factors, industry trends, and the company’s financial health may affect the employer’s willingness and ability to negotiate.

Seeking guidance from our employment attorney can provide insights into your rights and potential negotiation strategies and help ensure that the terms of the agreement are fair and legally sound. Give us a call today to know more. 

In Houston, Texas, and throughout the state, employers generally have no legal requirement to provide severance pay to employees upon termination. Texas is an “at-will” employment state, which means that both the employer and the employee can terminate the employment relationship at any time for any reason (with some exceptions related to discrimination and other protected categories).

Severance pay is typically offered at the employer’s discretion or may be outlined in an employment contract, company policy, or collective bargaining agreement. 

While employers are not required to provide severance pay, employees may still have certain rights and considerations related to severance agreements and packages. Here are some essential points to understand:

Age Discrimination in Employment Act (ADEA)

An employer offering a severance package to a group or class of employees must provide certain disclosures and a specific period for employees over 40 to review and consider the agreement. Additionally, employees have 7 days to revoke their acceptance of the agreement after signing.

Release of Claims

The employee agrees not to sue the employer for any potential legal claims related to their employment. However, there are limitations on the types of claims that can be waived, such as claims for workers’ compensation benefits.

Voluntary and Reduction-in-Force Severance Programs

These programs may outline the terms and conditions of the severance package and allow employees to consider their options. Employees must be provided with sufficient details in writing to assess whether the exit-incentive plan disadvantages older workers.

Unemployment Benefits

Severance pay may be considered income and could impact the calculation of unemployment benefits. It’s important to understand the potential impact on your eligibility if you are considering applying for unemployment benefits.

If you receive a severance agreement in Texas, it’s important to approach the situation carefully and consider the following steps:

Review Thoroughly

Carefully read through the entire severance agreement. Pay close attention to details such as the amount of severance pay, benefits continuation, confidentiality clauses, non-compete agreements, and any other provisions.

Take Your Time

Take your time signing the agreement. You typically have a certain amount of time to review and consider the offer. Use this time to fully understand the deal’s implications and seek legal advice.

Evaluate Your Options

Assess your personal and financial circumstances. Consider how the severance agreement terms align with your needs and future plans. Our employment lawyer in Houston, TX, can help you weigh the pros and cons of accepting the offer as is or negotiating for better terms.

Negotiate

If you believe that the initial terms of the severance agreement could be more favorable or need to adequately address your concerns, consider negotiating with your employer. Our legal team can assist you in formulating a counteroffer and navigating the negotiation process.

Evaluate Non-Compete Clauses

If the agreement includes a non-compete clause, consider its restrictions on your future employment options. Negotiating or modifying these clauses may be important if you want to work in a similar field after leaving your current job.

Make an Informed Decision

After reviewing the agreement, seeking legal advice, and potentially negotiating, decide whether to accept the severance package as offered, deal further, or decline.

Execute the Agreement

If you accept the terms, follow the procedures outlined in the agreement for signing and returning the document to your employer. Ensure that you keep a copy of the signed contract for your records.

Our employment law office is here to provide the guidance and legal assistance you require. Contact us today.