No matter how long you’ve been working for a company, discovering you need to find a new position elsewhere can be a difficult transition – especially if you were completely unaware the notice was coming. In addition to worrying about finding a new job, you’ll likely be worried about possible economic burdens, health insurance, and the disappearance of other benefits. Fortunately, there is a system in place to help ease the transition. Unfortunately, that system isn’t always as accessible as it should be.
In the event your employer has decided to part ways with you as a result of downsizing, restructuring, or a multitude of other reasons, a severance package is an important benefit that can help while you’re on the job hunt. The question is, however, under what circumstances does an employee have a right to a severance package?
Arkansas is an at-will employment state. This means that in most circumstances both the employer and employee have the right to end the employment relationship at any time for any reason, or for no reason at all, as long as the termination isn’t unlawful. Even with this established termination law, there are certain circumstances where an employee has a right to a severance package. It often takes a determined and effective legal team to maximize the value of the package. The Little Rock severance package lawyers from McMath Woods P.A. can help you if you’re having trouble getting the severance package you are owed.
What Is a Severance Package?
While there are no legal requirements mandating employers provide severance packages to employees, many companies will offer some sort of package. Typically, severance pay is based on the length of employment. So the longer you’ve worked there, the larger the sum will be. Some packages may also include health insurance coverage for a certain period of time, in addition to the continuation of other employee benefits.
Employers do not just offer severance packages to be kind to terminated employees. There is generally paperwork involved to ensure the employee will not say anything bad about the company. It’s also important to note that some severance packages come with stipulations that do not allow employees to pursue legal action against the company that is terminating them or seek work with a competitor.
A company’s severance policy will typically include the following parts:
- The purpose of the severance policy
- The severance pay conditions
- The groups or specific titles who are covered by the policy
- How the severance pay is calculated
- How the severance is paid to the terminated employee
- Paperwork to be signed by both the employee and employer
- The employer’s right to modify the agreement
While not every employee is eligible for a severance package, let’s take a look at what rights an Arkansas employee has.
When Does an Arkansas Employee Have the Right to a Severance Package?
Although Arkansas is an at-will employment state, companies hoping to recruit top corporate talent frequently offer employment agreements that include severance terms as an incentive to choose their company. Depending on the level of detail in the agreement, severance benefits can be tied to performance, the grounds for discharge, or length of employment.
Employees who do not have a contract may be covered by a company policy in favor of severance under certain circumstances. That policy may be contained in the employee handbook or other company documents. An employee might also have the leverage to negotiate a severance package if the termination would raise suspicion of discrimination, such as ageism or another form of bias, or unlawful retaliation.
What Are the Benefits of Hiring a Lawyer to Review Your Severance Package?
Knowledgeable employment law attorneys can help you negotiate severance terms in the event of a dispute. With legal representation, you’ll have the assistance you need to ensure the benefits are appropriate and performance metrics are reasonable, measurable, and attainable.
If you are separating from your employer numerous severance issues can arise, including:
- Disputes over performance metrics
- Disputes over valuation of benefits
- Stock option conflicts
- Level of payment
- Application of noncompete agreements
- Refusal to offer severance
- Eligibility for unemployment compensation
- Future obligations, such as the duties to cooperate and not disparage
- Cause for termination
An attorney can review your offer, or the circumstances behind the refusal of an offer, and give advice on how to improve your situation. They may be able to negotiate greater benefits, especially when the basis for discharge is not compelling or there is evidence of discrimination or retaliation. If there is evidence of discrimination, you may have the option to file a claim with the EEOC.
In addition to possible disputes, companies often use severance agreements as an inducement to agree to a strict noncompete agreement, which can limit your ability to accept other employment offers, as we mentioned above. An employment law lawyer can help protect you from overly restrictive NCAs, so you can freely accept other positions – regardless of the company.
In some cases, an employer will promise an acceptable severance package and never deliver. Employment litigation lawyers can help you enforce your agreement and obtain the benefits you deserve.
How Can a Little Rock Severance Attorney Lawyer Help?
McMath Woods P.A., represents Arkansas employees in disputes over severance agreements. We have extensive experience with employment law and are willing to fight for what you deserve. To learn how we can maximize the value of your benefits, contact us to set up a free consultation. Our Arkansas severance package lawyers will review your case and let you know what your options are today.