Severance Agreements

News & Analysis as of

Non-compete Restrictions in Texas Severance Agreements

One of the most frequent Texas non-compete questions I am asked is whether an employee and employer can enter an enforceable non-compete agreement at the time of termination. From the employee's perspective, this seems...more

A Quick Guide to the Taxation of Retiring Allowances

When an employee’s employment is terminated without cause, the employee will typically receive some form of a termination/severance payment. All or part of this termination/severance payment may be considered a “retiring...more

Hutchison v. Shull: Expanding Iowa’s Open Meeting Law (Part 1)

Warren County is governed by a three-member Board of Supervisors. The supervisors asked the Warren County Administrator to assist the Board in their stated goal of improving the efficiency of the county government. To that...more

Consider Liquidated Damages to Deter Employees From Misappropriating Company Information

It is not unusual for employment agreements to mandate that when an employee leaves a company, whether voluntarily or by termination, he or she must return all company information. As the employer in EventMonitor v. Leness...more

Utah Enacts Post-Employment Restrictions Act

A growing number of states are tightening conditions on restrictive covenants.  The start of 2016 saw Oregon and Alabama enact higher barriers to the enforcement of non-compete agreements in those states. As of March 22,...more

New Utah Law Limits Restrictive Covenants to a One-Year Period

On March 9, 2016, Utah enacted the Post-Employment Restrictions Amendments, which limits restrictive covenants to a one-year time period from termination. Any restrictive covenant that is entered into on or after May 10,...more

Employment Law Commentary - Volume 28, Issue 2 - February 2016

Separation Anxiety: Best Practices for Employee Severance Agreements: Employers deal with employee separations all the time. Back when I was an HR manager for a major airline, when it came time for a layoff or other...more

How to Fire Your Employee Without Getting Sued

Before I even begin this post, let me advance the disclaimer right off the bat: Despite the title of this post, there is no sure-fire way to fire an employee without getting sued. Indeed, the title is a bit of a...more

Labor & Employment E-Note - February 2016

The U.S. Department of Labor ("DOL") recently announced that its long awaited changes to the federal overtime regulations will be published in July 2016. The revised regulations, which were first discussed in March 2014, are...more

Continued Employment is Enough for a Severance Agreement

Here’s one where the tables were turned. Former employees often argue that a non-compete agreement is unenforceable because there was inadequate “consideration.” Consideration is the exchange parties to a contract make, what...more

Stop Trade Secret Thieves Before They Leave

One of the most likely times to lose trade secret protection occurs when an employee leaves the company. If there are feelings of resentment, the employee may want to harm the employer, or the employee may mistakenly feel...more

Seventh Circuit Affirms the Dismissal of Lawsuit Based on the EEOC's Failure to Conciliate Claims Related to Releases

On December 17, 2015, the U.S. Court of Appeals for the Seventh Circuit affirmed a district court’s dismissal of the Equal Employment Opportunity Commission’s lawsuit against CVS Pharmacy.  This lawsuit has been the subject...more

SEC Whistleblower Report Shows Increase in “Tips”

The Securities and Exchange Commission’s (SEC) Office of the Whistleblower (Office) recently released its 2015 Annual Report on the Dodd-Frank Whistleblower Program (Report) (November 16, 2015)....more

Seventh Circuit Tosses EEOC Lawsuit Challenging CVS Severance Agreements Due to Failure to Conciliate

Last month, the Seventh Circuit again rejected the Equal Employment Opportunity Commission’s attempt to declare an employer’s standard severance agreement illegal under Title VII. The EEOC and CVS Pharmacy have clashed over...more

EEOC Must Conciliate, But Still Few Answers Regarding Routine Separation Agreement Provisions

In February 2014, the EEOC sent waves through employer communities when it filed a lawsuit against a national retail pharmacy contending some of the company’s separation agreement provisions — which many considered “standard”...more

Seventh Circuit Rejects EEOC’s Attack on Severance Agreements

On December 17, 2015, the U.S. Court of Appeals for the Seventh Circuit upheld the dismissal of a lawsuit by the EEOC against CVS Pharmacy, Inc. In Equal Employment Opportunity Commission v. CVS Pharmacy, Inc., the EEOC...more

Seventh Circuit “Releases” CVS From EEOC’s Separation Agreement Attack

As we previously blogged about, the EEOC has gone on the offensive challenging employer severance agreements. In one such case, the EEOC attacked CVS Pharmacy Inc.’s standard release agreement which contained terms more...more

7th Cir. Won’t Let EEOC Skip Pre-Suit Conciliation

When CVS fired store manager Tonia Ramos in 2011, it offered her its standard severance agreement that included a broad release of waivable claims, including claims under Title VII, but explicitly preserving the right to...more

Benefits Litigation Update – Fall 2015

Message from ERIC President and CEO Annette Guarisco Fildes: Welcome to the Fall edition of Benefits Litigation Update, brought to you by The ERISA Industry Committee (ERIC) and the law firm of Epstein Becker &...more

Federal Court Allows Terminated Employee to Proceed with Age Discrimination Claim Despite Her Execution of a Release of Claims

A recent Colorado federal court decision serves as a good reminder to employers on how not to obtain a release of claims from a terminated employee. For starters, don’t tell the employee her job is being eliminated and then...more

Corporate Divorce Series: Disparage-Me-Not

If you have been following my corporate divorce series, you may have read the “Break Up” piece where I advised newly terminated folks to keep their cool if they are unexpectedly fired because their post-firing behavior might...more

Now’s the Time to Review Compensation Arrangements Relating to Unvested Rights

Correction of Errors before Year End Could Avoid Costly 409A Penalties - Sometimes overlooked is the fact that many employment, severance and change-of-control agreements are subject to U.S. Internal Revenue Code...more

Is Your Severance Policy an ERISA Plan?

Severance plans are generally covered under ERISA, but it is not always easy to distinguish an ERISA-covered severance plan from a non-ERISA severance policy. There are advantages and disadvantages to being an ERISA-covered...more

Getting Releases Right

There are times when it makes sense to resolve an actual or potential employment law claim by paying something and getting a release from the employee. Paying severance in return for a release and waiver of claims isn’t...more

Separately Assessing Separation Agreements

Separation or severance agreements —which typically provide a terminating employee with some kind of cash payment, temporary salary continuation, or other gratuitous benefit in exchange for a release of claims — have their...more

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