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Severance Package Negotiations

If you are threatened with being fired or laid off from your employment, I can assist you with the process of negotiating a severance agreement. A Minnesota Severance Package is offered for various reasons, but some of the reasons include:

  • The Employer has a policy of offering employees a Minnesota Severance Package
  • The Employee has claims that would give them leverage to negotiate a Severance Package
  • The Employer wants to obtain a Release for peace of mind to avoid costly litigation
  • The Employee has an Employment Contract that entitles them to a Severance Package
  • The Employee falls under a union contract that entitles them to a Severance Package

You should contact an experienced employment attorney to help you review your Minnesota Severance Agreement and Release. Contact Holden Law Firm and ask John Holden to review your Minnesota Severance Package or to determine whether you are eligible for a Minnesota Severance Package. John Holden can review your Severance Agreement and determine whether you have leverage to negotiate further benefits and explain what the Agreement means to you. If you are being threatened with termination or with a performance improvement plan, John Holden can discuss your leverage to negotiate a Minnesota Severance Package.

An employment severance agreement attorney can review, discuss, negotiate and often improve upon a Severance package. You should understand the Severance Agreement and Release and always consult with an attorney before signing a Severance Agreement and Release.

The first thing to discuss when you meet with an employment attorney is the reason for your employment termination. Was the termination for some wrong doing; elimination of the position; or some other reason. An attorney can discern if the employee has possible claims against the employer, and if an employee is releasing potential claims by signing the Severance Agreement and Release.

The decision to terminate an employee is a serious matter and the employer must provide a legitimate and truthful reason for the termination. Minnesota Statute, Section 181.933 states,

An employee who has been involuntarily terminated may, within 15 working days following such termination, request in writing that the employer inform the employee of the reason for the termination. Within ten working days following receipt of such request, an employer shall inform the terminated employee in writing of the truthful reason for the termination.

A Minnesota employer must also provide a former employee a copy of his or her “personnel records” upon written request. Minnesota Statues Section 181.960 states,

Upon written request by an employee, the employer shall provide the employee with an opportunity to review the employee’s personnel record. An employer is not required to provide an employee with an opportunity to review the employee’s personnel record if the employee has reviewed the personnel record during the previous six months; except that, upon separation from employment, an employee may review the employee’s personnel record once each year after separation for as long as the personnel record is maintained.

A Minnesota employer must also pay all wages and compensation actually earned and unpaid at the time of termination, pursuant to Minnesota Statutes, section 181.13. If the employee’s earned wages and commissions are not paid within 24 hours after demand, whether the employment was by the day, hour, week, month, or piece or by commissions, the employer is in default.

In addition to recovering the wages and commissions actually earned and unpaid, the discharged employee may charge and collect a penalty equal to the amount of the employee’s average daily earnings at the employee’s regular rate of pay or the rate required by law, whichever rate is greater, for each day up to 15 days, that the employer is in default, until full payment or other settlement, satisfactory to the discharged employee, is made.

The termination of an employee can result in a lawsuit for discrimination, retaliation, breach of a contract, defamation or some other employment law related claim if the employment termination is not handled correctly. The employer needs to establish a documented legally justifiable reason for the termination of an employee or there may be a potential claim that an employee can bring against the employer. A Severance Agreement and Release can provide closure for both the employee and the employer and allow the parties to move on in an amicable way.

Once it is determined that a Severance Agreement and Release is the proper way to conclude the employment relationship, the agreement can be reviewed in detail. Some of the items that should be reviewed in a Minnesota Severance Agreement are:

Terms of Termination and Severance Payments:

  • Lump sum severance payment or salary continuation (when the severance payments will be made)
  • Resignation or involuntary separation (this will affect whether you qualify for unemployment benefits)
  • Relieved of duties vs. immediate termination of employment
  • Unpaid bonus
  • Unpaid commissions
  • Expense reimbursements
  • Accrued vacation or sick pay
  • Stock options or purchases
  • Repayment of outstanding loans
  • Leased automobile
  • Taxation of payments

Health Benefits:

COBRA issues: continuation of coverage under medical and/or dental benefit plans Continuation of coverage under other benefit plans: disability, life, malpractice, directors and officers

Post Termination Concerns:

  • Outplacement services: dollar amount and provider
  • Contents of reference letter, if this can be agreed upon
  • Response to unemployment compensation claim
  • Can the employee apply for re-employment
  • Non-disparagement clause
  • Confidentiality of separation agreement

Agreements within the Agreement:

  • Release of claims
  • Non-competition agreement
  • Agreement regarding confidential business information and trade secrets
  • Non-solicitation of employees
  • Return of company documents and property; computer equipment, credit cards, manuals
  • Agreement to cooperate and assist with ongoing business
  • Non-admission clause

Other Provisions to Consider:

  • Employee’s non-assignment of agreement
  • Rescission period(s), if applicable
  • Voluntary and knowing action by employee
  • OWBPA-required language
  • Complete agreement between the parties
  • Governing law

Contact Holden Law Firm and ask John Holden to review your Minnesota Severance Package or to determine whether you are eligible for a Minnesota Severance Package.

John C. Holden
Holden Law Firm
5200 Willson Road, Suite 150
Edina, MN 55424

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