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Employment Claims Disguised as Severance Pay

Has Your Employer Violated Your Rights?

Employment discrimination, retaliation, harassment and other violations expose employers to legal action. In some cases, employers are not entirely sure that an action violated New Jersey or federal employment laws. A possible violation can be dealt with by employers in several ways. At Costello, Mains & Silverman, LLC, our employment law attorneys fight to protect the rights of employees. We know the tactics used by employers to avoid responsibility, including those involving severance pay.

Even though settlement isn’t required by law, one of the ways we tend to see the concept of severance being discussed is as cover for the desire on the part of an employer to settle claims it’s concerned that a departing employee may have against it. Understand that just because an employer offers severance pay, however, doesn’t necessarily mean that the company is “afraid” of what the employee is going to do. Perhaps the company is a little afraid because even though it suspects that the employee has no real employment claims (perhaps because the company knows the “facts” of why the employee is departing), the company may still worry that the employee may obtain counsel (who doesn’t necessarily know employment law) and file a frivolous, expensive and irritating claim against them. The company might feel that it could win this claim, but if it feels that it’s going to spend more money doing so than it could spend not to have to defend such a complaint at all, it might offer such a potential advance “settlement” of such claims under the guise of a ” severance agreement.”

This is why one of the first questions we ask here at Costello, Mains & Silverman, LLC when someone calls about severance agreements is why the employment is ending. Often, by asking the right questions and getting solid answers, we can determine whether or not we’re dealing with a scenario of this type (where severance pay is really cover for potential settlement of claims).

Now understand, just because we decide that there might be some cover-up in play, this doesn’t necessarily mean that we tell the client to turn down the severance. Regardless of what the severance really represents, the fact of the matter might be that in listening to the clients’ potential claim or claims, we decide that the figure that the client is getting is a decent settlement of those claims. Obviously, if the client could obtain that settlement now, without having to risk the money offered, or pay the firm any fees for representation, we’ll tell the client that it sounds like the right move to make.

On the other hand, when severance pay is disguising potential claims that the company worries that the employee has, and when we think those claims are worthwhile enough to jeopardize the severance and go for compensation that’s more just and fair, we’ll give that advice and have the client come in. We might tell the client to allow us to instruct the offering party that the severance agreement has been rejected, that we’re now representing the client for potential claims, and that a “real and just” settlement of the claims must take place.

As with all representation, we undertake such representation under a contingent basis where at all possible so that the firm, and not the client, accepts the financial risks of the representation.

If you suspect that you are being offered severance in lieu of pursuing claims against your employer, you should speak to an experienced employment law attorney before accepting. To schedule a free case review, contact us online or call 866-944-3371 today.