2

I've just left a job, and I am considering the severance agreement offered by the company. If I sign the agreement, I would get another two weeks' salary, on top of the two weeks' salary they have already given me. It's a pretty good deal, but I have some reservations.

The agreement has a confidentiality clause which says that I will not disclose the terms or the existence of the agreement, except to my family or to legal or financial advisors. This is awkward because friends, including former colleagues, are naturally curious about the circumstances of my leaving the company. I would like to explain that the company treated me quite well, but in order to fulfill the agreement, I would refuse to discuss or even to mention it--for the rest of my life.

In other clauses, I give up various other rights: the right to make any financial claims such as discrimination claims, or to sue the company. I even give up rights which are specifically guaranteed by state law. I don't have any desire to litigate, so this doesn't bother me much, but the confidentiality clause seems bizarrely severe. I'm a little surprised that it's legal.

(1) Is this kind of clause standard in the United States, and why is it so strict?

(2) Is it common for someone in my situation to refuse the agreement?

Edited to add: To be clear, I am not asking for legal advice, but for the experiences and insights of other people in the workplace.

Improve this question
3
  • 1
    VTC - The OP should be speaking to their legal advisor, not unknown people on the internet. – PeteCon May 11 '18 at 23:46
  • 1
    VTC - You should ask an attorney. FWIW: I would expect a 3-month salary equivalent for what you're describing, but that's me. – Wesley Long May 12 '18 at 0:43
  • I think the question is rather pointless, because there will be no severance agreement after your blatant breach of confidentiality. – gnasher729 May 12 '18 at 13:10
8

(1) Is this kind of clause standard in the United States, and why is it so strict?

Yes, that's very normal and standard. The company gives you extra money and in return, they want to minimize any legal exposure. You can't sue them for more and if you tell any other people, the next guy will ask (or sue) for what you got and more. Accepting "severance" is basically money to make sure it "ends here and now" and there are no consequences that linger on for years.

(2) Is it common for someone in my situation to refuse the agreement?

No. Unless you have an ax to grind, or are planning to go after the company for more cash or some legal action, it's typically best to take the money and move on.

So far, so good. However, what's strange (in my opinion) is that the company offers severance in the first place. Severance is quite common if someone gets fired, but very rare if someone quits on their own. There is absolutely no obligation for the company to give you anything, and you are on your way out anyway. It's quite unusual that they would offer this to you.

It's possible that they are afraid that you either know something or take an action that would expose them to some kind of risk. Hence they offer extra money to shut you up. It's also possible that you may have very specific business or technical knowledge that they don't want to get out or move to a competitor and that's not already protected through the agreements that you have already signed. I would recommend carefully reading the agreements that you have already signed and compare them to the language in the severance agreement. If there are substantial differences, this may be a hint what's going on here.

Improve this answer
1
  • @JoeStrazzere I have heard of a US head quartered company in the UK doing this – Neuromancer May 12 '18 at 17:23
5

Seems to me that you are in full rights to accept or reject that severance agreement; it's up to you to decide what you actually want to do.

If you really need that money, and won't mind refraining from discussing the agreement with anyone then you should go for it. But, if this seems to extreme to you (personally, it sounds a bit extreme based on your partial description), then I would suggest you leave without that extra money, but with peace of mind.

Now, regarding other point:

This is awkward because friends, including former colleagues, are naturally curious about the circumstances of my leaving the company. I would like to explain that the company treated me quite well, but in order to fulfill the agreement, I would refuse to discuss or even to mention it

I think that you are mixing things up here.

One thing is to mention the agreement, which if you sign it you shouldn't, and other thing is to mention the causes of you leaving. The latter one as far as I can tell you are free to discuss (IANAL though, would have to read that agreement).

In other words, if you sign the agreement you will have to keep your word and don't mention about it (and give up those rights in the process), but that is different from your reasons for leaving, which is not the same as mentioning the agreement.

Improve this answer
1
  • That's true, I can talk about the circumstances that led to my leaving, and I plan to do that. But I find that people are also curious about the specific arrangement that the company and I came up with--for example, whether there was anything like a severance payment. – Hew Wolff May 15 '18 at 16:05
1

I dont comment on the legal aspects. I will rather describe why it is perfectly sensible (i am not talking about legality or ethics here) for a company to attempt to have something like this:

Every employee who leaves is special in some sense

  • value to the project

  • projected cost into the future

  • estimation of HR/Manage how valuable he/she is to keep

  • possible legal issues

This means that it would be extremely bad for a company if employees tried to infer how much money "typically" is offered. Most likely this rule was meant to keep difficult poisonous ex-employees from talking to former colleagues, and I suppose they only have a standard clause, which they offer to anyone.

Much more difficult for the employee representative to establish a baseline if people are not allowed to talk - so yes, the clause most likely also practically limits the capabilities of the employees to collect the information needed which would support them in negotiations/lawsuits etc...

Improve this answer
-1

When friends and family are curious, you tell them that you signed a confidentiality agreement. Most people follow this by "I could tell you, but then I would have to shoot you". Most people will understand.

If they insist, you ask them to sign a legally binding contract where they agree to pay for all damages that you suffer by breaking the confidentiality agreement. Minimum damage would be repayment of all money you received.

Can you refuse? Sure, but there will be no severance agreement, so any money you will receive will be whatever is legally required.

Improve this answer
1
  • Not a good idea if the confidentiality agreement tells you not to even disclose its existence to anyone outside your family. – Simon B May 12 '18 at 21:23

Not the answer you're looking for? Browse other questions tagged .