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Severance Agreement Pitfalls

In another recent decision, the Tenth Circuit Court of Appeals (which includes Oklahoma, Kansas, New Mexico, Colorado, Wyoming and Utah, as well as parts of Yellowstone National Park, which extend as far as Montana and Idaho) cancelled publications signed by the plaintiffs after the employer failed to comply with the OWBPA requirements. In particular, the employer did not disclose the correct “decision unit” in the authorization agreements and did not list all the “eligibility factors” used to determine who is subject to the redundancy program. Again, the publications “did not meet the strict and unlimited requirements of the OWBPA” and therefore became legally ineffective. Here are the most important questions to consider when severing pay: Practical tip: Severance pay or plans requiring payment of severance pay should also require the former employee to sign an release agreement in exchange for severance pay. “You want to be careful in claiming different severance pay during a group separation,” says lawyer Kristin Michaels of McDermott Will-Emery in Chicago. “Otherwise, an employer may open up to the assertion that it has acted in a discriminatory manner.” Many separation agreements include a non-disappearing regime that prevents the former employee from making negative statements about the employer. In addition, some of these provisions contain a standard language requiring the former employee to waive his or her right to communicate with government authorities or to recover compensation for whistleblowers. Recently, some government authorities, including the Securities Exchange Commission (SEC) and the Equal Employment Commission (EEOC), have found that such language, in a separation agreement, insists on unacceptable restrictions on the former employee with respect to whistleblowing activities. Any provision that limits the former employee`s ability to communicate with government agencies in the separation agreement should be carefully reviewed. A company may be required to pay severance pay under the employee`s employment contract, the WARN act or its state equivalent or company policy. Although the company is not required to pay severance pay, it will often offer severance pay in exchange for various agreements of the dismissed employee, including the release of any claims against the company (see below).

An executive has the best chance of negotiating severance pay if the employee has been dismissed for no “reason,” as defined in an employment contract. 7:40-7:50: pros and cons of severance pay; Effective strategy development and communication The “short-term deferred” exception normally exempts the amounts paid no later than March 15 of the calendar year following the calendar year in which the worker`s right was transferred to severance pay. If, for example.B. an employee is dismissed in the 2017 calendar year, as long as all severance pay is paid on March 15, 2018 or before March 15, 2018 and the worker is not entitled to payment before 2017, severance pay would be exempt from the application under Section 409A.

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