Severance Agreements in Alabama

When an employee is terminated, some employers will offer the discharged worker a severance package including pay and benefits. A severance agreement or separation agreement is the document that sets out the terms and conditions of that package. This documents usually states what the employee is receiving in exchange for providing the employer a release of any legal claims and confidentiality. Because Alabama is an at-will state, employees can be terminated without cause. Therefore, unless an employer is bound by a union contract dictating otherwise, Alabama employers are not generally obligated to offer severance to discharged workers.

When presented with this sort of agreement, most employers will permit you some time to review the agreement with counsel. If you are over the age of 40, the employer must give you 21 days to review the agreement in order to release any potential age discrimination claims. It is important to take the time to read over the agreement and consult an attorney to ensure you understand each and every term. That way you can consider what the employer is hoping to get from you in exchange for their payout. Some things to consider:

1. Does your employer have an interest in deterring you from taking a job with a competitor? If so, this may be reflected in the terms of your severance either by a non-
compete or non-solicitation agreement.

2. Were you terminated on the basis of your age, race, religion, or gender? If so, the terms of the severance agreement may ask you to waive your rights to file that claim.

3. Were you terminated after taking FMLA leave? Or were you terminated after engaging in some other legally-protected activity such as reporting sexual harassment or assault? If you were terminated for engaging in a legally-protected activity, then you may have a
claim against your employer. By signing your severance agreement, you might waive
your rights to file that claim.

4. Does your severance agreement offer any benefits or reimbursement for COBRA
coverage while you attempt to find other suitable employment?

5. How does the company handle reference inquiries from future employers?

When presented with a severance agreement, which may offer something like a couple months of pay, an individual who just lost their job may feel immense pressure to just take the deal. When faced with unexpected termination, anyone might feel backed into a corner. It is difficult to carefully consider the terms of a severance agreement when worrying about the stress your loss of income might cause. However, it is critical to review your agreement closely to determine what rights you may be signing away in return.

Beckum Law has substantial experience in advising and negotiating regarding severance agreements on behalf of Alabama employees. We offer both contingency (you only pay a percentage of how much we increase the severance package) and flat fee arrangements. If you have any concerns regarding your severance agreement is fair or whether you may have suffered actionable harm at work, please contact us at (205) 588-0699 for a free consultation to discuss your situation.

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