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Wednesday Worklaw Alert: New Jersey Severance Agreement Checklist 

December 9th, 2020 Christopher Davis

A severance agreement is a contract between you and your employer that outlines each of your responsibilities and rights when you are terminated from your job. Oftentimes, severance agreements are worded in ways that benefit the employer at the cost of the employee. An employment lawyer can assist in reviewing your severance agreement and, if necessary, negotiate the terms with your employer to ensure you know your rights and are maximizing your benefits. 

What should I look for in a severance agreement? 

  1. General release of all claims: Make sure you do not sign an agreement that takes away your ability to file claims, such as whistleblower or workers’ compensation.  
  2. Continuing health coverage: Check that your agreement provides for health insurance to bridge the gap until you find new employment, such as COBRA. 
  3. References: Ensure your employer is contractually bound to provide references to future employers. 
  4. Mutual non-disparagement: Make sure that if you are agreeing not to disparage your former employer, they are also agreeing not to disparage you.  
  5. Severance amount: Review the total package and ensure that it is sufficient to sustain you until you are able to find new employment. Sometimes, employers provide a low amount with the expectation that employees will negotiate it.  
  6. Reason for termination: Make sure you do not sign an agreement that lists your reason for termination as something that will prevent you from collecting unemployment. 
  7. Non-compete clause: Check the agreement for any non-compete clauses that are more restrictive than any you signed at the start of your employment.  
  8. Mutual releases: Ensure that if you are releasing your employer, your employer is also releasing you.  

Severance in New Jersey and Related Laws 

New Jersey state labor and employment laws provide a great deal of protection to employees facing termination. In New Jersey, if you have been fired under work circumstances that suggest discrimination, you may have rights protected under the New Jersey Law Against Discrimination (NJLAD). The NJAD applies to all employers regardless of the number of people they employ, a significant difference from some federal anti-discrimination laws. Additionally, unlike other states, New Jersey recognizes common-law claims of wrongful termination in violation of public policy. An employee must show that their termination violated a “substantial” New Jersey public policy, such as serving on a jury or refusing to violate laws. Lastly, New Jersey has a very strong whistleblower law called the Conscientious Employee Protection Act (CEPA). The CEPA provides protection to employees who engage in actions such as disclosing or refusing to partake in employer activity that may be illegal or fraudulent or providing testimony before a public body investigating their employer. 

Seek Legal Assistance Today 

If you would like your severance agreement reviewed or negotiated, seek legal assistance from the Working Solutions Law Firm. We are pleased to announce the opening of our New Jersey office, located at 354 Eisenhower Pkwy Building 2 Suite 2775, Livingston, NJ. Contact us today at (646) 430-7930 to schedule a free case evaluation and receive experienced legal counsel.