1. What is a severance agreement?
A severance agreement is a contract between the employer and the executive.
The employer promises to give the executive certain benefits. These may include money (in forms such as a lump sum payment, salary continuation or payment of continued healthcare (COBRA) premiums), outplacement services and a good letter of reference.
In exchange, the executive gives the employer a release of any legal claims the executive may have, including claims for disputed wages or bonuses, wrongful discharge and discrimination.
For a severance agreement to be enforceable, the employer must give the executive something more than what he/she is already due. It is not sufficient, for example, for an employer to seek a release from an executive in exchange for wages, salaries, commissions, bonuses and vacation pay that the executive has already earned or accrued.
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2. Why does my severance agreement provide that I have 21 days to consider the employer's offer
and 7 days to revoke?
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