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Discrimination waivers find their way into severance packages

On Behalf of | Nov 23, 2022 | Discrimination, Employment Law

Even though layoffs are becoming more common these days, severance agreements have been a part of the employment landscape for years. However, while these agreements have usually only been part of high-paying or high-level positions, over the past few years, they have creeped into almost all levels of St. Petersburg, Florida, employment. Why? In a word, waivers.

Discrimination waivers

When an employee is let go, for whatever reason, there is a potential that the employee could sue the employer. And, unless there is a mountain of documentation justifying that firing, the employee may have a cognizable case that could cost the company thousands, even if they ultimately win the case.

Discrimination waivers can solve these litigation issues as the employee is giving up their option to sue post-employment. Often, these waivers include a general waiver, in addition to specific discrimination waivers that encompass a plethora of state and federal anti-discrimination statutes and regulations.

Contract law still applies

Whether or not severance agreements are valid depends on a variety of factors. The first factor is whether or not the contract itself is a valid contract. One of the basics of contract law is it must be a bargain for exchange and there must be consideration that flows from each party to the other party.

In the context of a severance agreement, this means that the employee is giving up their right to sue, and the employee must receive something for giving up their right to sue. The key here is that what the employee receives must be something separate from what they are already entitled. For example, if they are already entitled to a pension, vacation time, sick leave, etc., it cannot be used as consideration for the severance agreement waivers. In other words, employers cannot hold benefits and entitlements hostage to force an employee to give up their rights.

Knowingly and voluntarily

Another big point of contention for severance agreements is whether the discrimination waivers were entered into knowingly and voluntarily by the employee. What this means is different for each federal and state anti-discrimination statute, which is why a St. Petersburg, Florida, attorney is needed to review pre- and post-signed severance agreements.