Severance and Non-Compete Agreements

The attorneys at Patterson Harkavy regularly work with employees entering into contracts with their employer.  Whether you are starting a new job, leaving your current job, or being asked to sign an agreement by your current employer, our attorneys can help ensure that you understand your obligations, maximize your benefits, and protect your rights moving forward.

What is a severance agreement?

A severance agreement is an arrangement made between an employee and employer at the end of the employment relationship. These agreements can be very valuable to a departing employee.  However, just because an employer offers you a severance agreement does not mean that you should accept it. You may be waiving your rights, and you may be limiting your ability to find future employment.

Several factors can affect whether or not signing a severance agreement is actually in an employee’s best interest. Questions an employee should ask include:

  • Do you have any potential legal claims that you could pursue against the company rather than accepting the severance offer?
  • Is the amount of severance offered reasonable given the merits of your potential legal claims?
  • Is the amount of severance consistent with industry standard given your position within the company and your years of service?
  • Does the severance agreement provide you adequate protection from employer criticism when prospective employers call for references?

Our attorneys can talk to you about your employment history, what you want to do in the future, and the reasons you were terminated, to help determine if signing an agreement is to your advantage. We can also identify beneficial changes to the offer and figure out how best to negotiate with your employer. Employees are often asked to sign severance agreements on a short deadline. Don’t enter into an agreement without making sure you understand its terms and are comfortable that signing it is in your best interest.

What is a non-compete agreement?

A non-compete agreement is a contract in which an employee agrees not to compete against the employer following the end of the employment relationship.  Employers value non-compete agreements because they prevent competitors from benefiting from a departing employee’s training, knowledge, and relationships.  Signing a non-compete agreement can greatly impact an employee’s ability to secure new employment if they are terminated or resign.

Courts treat non-compete agreements differently than regular contracts.  Courts will only enforce non-compete agreements if they are limited to reasonable geographic areas and prohibit competition for a reasonable period of time.  There is not an easy way to determine if a given non-compete agreement is enforceable.  Whether you are being asked to enter into a non-compete agreement, or you are interested in whether an existing agreement is enforceable, our attorneys can help you understand your rights and your options.

What can I do?

If you have any questions about an employment contract, non-compete agreement, or severance package, call Patterson Harkavy toll free at 1-800-458-2541 or contact us online.