Fairfield CT Employment Law Attorneys

Offer Letters and Separation Agreements in Business

Offer letters and Separation Agreements are two sides of the same coin. An offer letter is forward looking. It defines the employer’s and employee’s respective rights and obligations on a going forward basis. A Separation Agreement, on the other hand, is rearward looking. It defines the parties’ rights and obligations post-employment. Both documents are vitally important and should be negotiated, drafted, and executed with extreme care. At the law offices of Maya Murphy, P.C., we assist our clients in all aspects of employment law in New York and Connecticut, including offer letters and Separation Agreements.

An offer letter should set forth clearly and comprehensively the pertinent terms and conditions of employment: position, responsibilities, location, term, compensation (salary and bonus, if any), benefits (including vacation and whether accrued and unused vacation will be compensated upon termination), as well as any other bargained for terms or conditions. Ideally, an offer letter should apprise both employer and employee of exactly what is required from each of them.

Most separation agreements contain restrictive covenants—confidentiality, non-solicitation, or non-competition clauses. The first two—confidentiality and non-solicitation—are typically non-controversial, as they often confirm pre-existing obligations owed an employer by a former employee. The last—non-competition—is usually a point of contention, as it impacts directly the employee’s ability to find a new position.

First of all, do not be surprised by the length of a separation agreement. A federal statute called the Older Worker’s Benefit and Protection Act requires the inclusion of extensive release language, and such things as a 21 day review and seven day revocation period. Here are some of the other things you should be on the lookout for:

  • Consideration: Make sure all of the severance benefits are correct and clearly stated. This includes severance pay, COBRA coverage, etc. Do not leave anything to inference or implication.
  • Confirmation that No Claims Exist/Covenant Not to Sue: Notwithstanding the comprehensive release language, some separation agreements will also require the employee to state that he/she is not aware of any factual basis to support any charge or complaint and that the employee will forego suit, even if such a claim exists.
  • Non-disparagement: Both sides often agree that neither will say anything to disparage the other. Sometimes (particularly in the financial industry), a separation agreement will contain a “carve out” for employer reporting to FINRA or the SEC. In such a case, it is important to have the agreement state that as of the employee’s separation date, the employer was not aware of any reportable event or information that would warrant comment or notation on a Form U-5.
  • Governing Law: Employment law does not travel well across state lines. For example, California law is much different than Connecticut’s. Large companies will sometimes have their separation agreements governed by the law of the state where it has its headquarters, irrespective of the actual place of work of the departing employee.
  • Acknowledgement of Non-Revocation: An employee has seven days within which to revoke acceptance of a separation agreement. Some companies adopt a “belt and suspenders” approach and require the employee to acknowledge in writing a negative—that they have not revoked such acceptance.

Skilled Employment Law Attorneys in New York and Connecticut

If you need assistance with an offer letter or Separation Agreement situation, contact the experienced employment law lawyers at Maya Murphy, P.C. Our law firm has three offices throughout the area, including one in Westport and two in New York City. Call 203-221-3100 or 212-682-5700 for help with your matter today.

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