When an employment relationship ends in South Florida, both parties often encounter a separation or severance agreement. Florida law does not generally require private employers to offer severance pay unless mandated by an existing employment contract, company policy, or collective bargaining agreement. A severance package offered in exchange for a signed liability release can limit legal exposure and provide departing workers with financial support during a transition. Because a severance agreement is a legally binding contract, both sides need to evaluate its terms carefully.
Key provisions employees must review before signing
Signing a severance agreement permanently waives legal rights. Before accepting any offer, employees should consider the following.
The scope of the release of claims is central to any severance agreement. In exchange for financial compensation, the employee agrees to give up the right to sue over past workplace disputes. Employees should verify exactly which claims are being released. Importantly, per EEOC guidance on severance agreements, a severance agreement cannot prevent an employee from filing a charge with or participating in an investigation by the EEOC or the Florida Commission on Human Relations.
For workers age 40 or older, the federal Older Workers Benefit Protection Act adds specific procedural requirements. Individual agreements must allow at least 21 days for review, or 45 days when the separation is part of a group layoff or reduction in force. The employee has a mandatory 7-day window after signing to revoke the agreement. The agreement must also advise the employee in writing to consult with an independent attorney before signing. Failing to follow these steps can invalidate the waiver of age discrimination claims entirely.
Employees should also review any new or reinforced post-employment restrictions included in the agreement. Non-compete and non-solicitation clauses, non-disparagement provisions, and confidentiality terms can all limit future employment options or the ability to discuss the circumstances of the separation.
Finally, severance payments can affect eligibility for Florida reemployment assistance. Severance pay may delay or disqualify an individual from receiving benefits for the weeks covered by the payout.
Key considerations for employers drafting separation agreements
For South Florida employers, an enforceable severance agreement requires valid legal consideration. The financial benefit offered must go beyond what the employee is already legally owed. Paying only wages already earned, such as final paychecks or earned commissions, does not constitute valid consideration for a release of claims.
Boilerplate or standardized agreements also carry enforceability risks, particularly in group terminations. When laying off workers age 40 or older, employers must provide OWBPA disclosures listing the job titles and ages of all employees both selected and not selected within the relevant decisional unit. Missing these disclosures invalidates the waiver of age discrimination claims.
Employers should also review whether the departing employee recently engaged in protected activity before presenting a severance offer. A recent workers’ compensation claim, wage-and-hour complaint, or discrimination or harassment report can create retaliation exposure if the severance process is not handled carefully.
Getting legal guidance
Whether you are an employee reviewing a proposed offer or an employer drafting separation contracts, experienced legal counsel can help protect your interests under federal and Florida employment law. Contact an attorney about your situation.