Understanding severance packages

On Behalf of | Jan 20, 2023 | wrongful termination |

Typically, many work contracts will come with a severance package. This also describes circumstances in which an employer might terminate the contract.

It is possible to negotiate the aspects of these contracts before signing them, and this is crucial when it comes to things like severance packages.

At-will employment

Inc.com discusses the important different components within a contract. This includes severance packages, which define what happens in different situations where a person leaves a job or ends up fired.

First, many contracts include the at-will employment clause. This means an employer can terminate the contract for any reason, which makes it so an employee cannot sue for wrongful termination. However, certain protections exist for whistleblowers and protected classes, who can take action if they feel their termination happened due to their whistleblowing or protected status.

Firing for cause

Next, there is firing for cause. Grounds for termination under this category could include poor job performance or rule violations. In these cases, employers may even have the right to take away perks or bonuses.

Firing for job changes

Firing because of job changes usually results in the biggest severance packages. If your employer predicts that your position will not last due to internal rearrangement, they will put in a constructive termination clause.

Leaving a job

Finally, these provisions will discuss what happens if a person decides to leave the job on their own. It is important to ensure the contract does not qualify benefits based on why, when or how a person leaves the position.

Of course, each contract differs. This is why it is important for workers to carefully read their own before signing.