Employers have been negatively impacted by the sour Georgia economy and many have been cutting costs to remain profitable. Unfortunately for many hard-working Georgians, some employers have been cutting costs by offering less (or in some cases none at all) severance packages to terminated employees. As a Georgia lawyer with a great amount of experience representing terminated workers; executives who are not fully paid salary owed to them, and salespeople who are not paid commissions owed to them upon termination, I am seeing a strong surge in the amount of claims related to these areas over the last 2 years. This post focuses on severance pay.
Absent a written contract which requires certain payments upon termination, severance payments are not required in Georgia. However, many employers choose to provide severance packages to terminated employees for a number of reasons. Some companies provide severance pay to garner goodwill with their employees (this goodwill extends not only to the fired employee, but also to the current employees who see how well the terminated employee is treated and, hence, view the employer in a better light). However, some employers use severance payments as a shield against any future liability or waiver of all future claims and lawsuits by the terminated employee. This is where it gets complicated and when you should consult with an experience Georgia lawyer if you are put in this situation.
Many times the employer will offer a severance package and present it to the terminated employee with a “full release of liability.” The offer of severance will be open for a short time and is expressly conditioned on the employee signing the release by the deadline imposed by the employer.
While this may be “good business” for the employer, it may not be in your best interest to sign the release and take the severance being offered. This is a difficult decision that should be discussed with a good attorney to make sure you do not leave any money on the table, or that you do not release valuable legal claims that you may have. Some fired employees may have potential lawsuits related to outstanding commissions that are being wrongfully withheld by the employer, final paychecks which have been withheld, unlawful discrimination, OSHA violations, Fair Labor Standards Act (“FLSA”) violations, or any number of other valuable claims. At a minimum, your potential claims should be discussed with an experienced Georgia business lawyer prior to signing anything given to you.
As a practical matter, most employers provide a 21-day period to review the severance package being offered and the package states that the company urges the terminated to consult with a lawyer. Obviously, the company puts this language in the agreement as a protection against the terminated employee claiming that they did not know what they were signing or did not understand the effect of the document they signed. In most cases, the legal effect of signing the documents that come with a severance package that is being offered to you is that you release any and all claims against the company that you have, or may have in the future related to any conduct of the company up to the date you sign the release. Since this is a broad release, you should be absolutely sure be certain that you know: (1) what potential claims and causes of action you may have based upon your employment; and (2) the money that you are receiving is worth foregoing these causes of action.
Robert J. Fleming is an experienced business trial lawyer. In addition to a law degree, Mr. Fleming has earned an MBA in finance, has acted as general counsel to a number of businesses, has successfully litigated many large fraud cases and has a successful business background. This unique set of experiences and skills has enabled Mr. Fleming to achieve record successes in this area.
If you would like to discuss your case with us, please call Robert J. Fleming, at (404) 923-7497 or contact us online. We are here to help.