TikTok has become a growing resource to find everything from dollar store recipes to cleaning hacks — and even personal finance tips. One of the latest video making the rounds seeks to give employment advice to workers who may have been fired, laid off or quit their job.
@AttorneyRyan, a labor lawyer, advised viewers: “Just because your boss or HR says you have to sign something, that does not make it true. You don’t have to sign anything when you’re fired. You don’t have to sign anything when you quit.”
But is he correct? And is it ever in your best interests to sign documents presented by a former employer? Sometimes it might be, some lawyers interviewed by GOBankingRates said.
Understanding a Severance Agreement
Most commonly, an employer might offer a severance agreement for an employee who has been laid off.
Alex Granovsky, a labor and employment lawyer with Granovsky & Sundaresh, PLLC, explained how a severance agreement — or a separation agreement and release — works. “At its core, it’s an exchange between an employer and former employee. In exchange for a promise from the former employee — most notably, the promise not to sue their now-former employer, the employer gives the employee certain things… most notably, money.”
He continued, “I think there are certain circumstances where an employee should sign one.”
However, Granovsky said, if you feel you are being wrongfully terminated or discriminated against for your age, race, or disability, you should not necessarily sign a severance agreement. Granovsky advised, “You are being paid as a departing employee X amount of dollars to not sue the company.” But if you have grounds to sue the company for discrimination in, for instance, a $1 million lawsuit, you will not want to sign a paper waiving that right to sue.
“If your employer isn’t offering you adequate consideration,” Granovsky said, “you should renegotiate.”
The Benefits of Avoiding a Court Case
Often, employers and employees have good reason to settle with a severance package and avoid a court case. David Schein, an attorney in Houston, said that he sometimes sees situations where someone signs a severance agreement or a form saying that they are resigning without speaking to a lawyer.
If the employee is resigning, he says, because they feel they were discriminated against, this is considered “constructive discharge.” It’s important to speak with an attorney to know your rights in this situation.
In some cases, it’s better to sign a generous severance package than take it to court, Schein noted. “In the case of constructive discharge, you have to show that you couldn’t keep working there. It’s a relatively high burden, and investigations often take a year.”
Know Your Rights as a Worker
Workers over 50 have certain additional rights when it comes to labor laws in the U.S., Schein pointed out. The Older Worker Benefit Protection Act gives employees over 50 years old 21 days to review their severance agreement with a lawyer. Once you’ve signed the document, you have seven additional days to change your mind, he said.
Be aware, however: “If you’re taking a lump sum settlement, you won’t get that check until the eighth day,” Schein advised.
Have a Lawyer Review Any Documents
Having your own lawyer review any documents is always a good idea, Schein and Granovsky agreed. “You should never sign any legal document unless you know what it is you’re signing and what you’re getting into. That’s always the case,” Granovsky said.
Companies may slip language into a document, such as a non-compete, that you may want to fight. Additionally, as @AttorneyRyan pointed out on TikTok, some language in resignation agreements could lead to waiving the right to collect unemployment benefits — although that circumstance varies on a state-by-state basis.
“If an employee signs something that says they were terminated for cause, that could result in a denial of unemployment benefits,” Granovsky said.
Schein added, “Don’t sign anything without reviewing it with your attorney.”
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