Is an employer required to provide severance pay in Florida and can I negotiate a better separation agreement?
Under Florida law, in the absence of a requirement in an employment or collective bargaining agreement, the employer is not required to offer or provide severance or separation pay upon an employee’s termination of employment. However, employers will often offer or pay severance or separation pay for a number of reasons. For example, where the employee is being terminated as part of a reduction in force (RIF) or layoff, the employer will often provide separation pay since the employee is losing his or her job through no fault of his or her own.
Oftentimes, the employer will tie the offer to pay severance with a requirement that the employee sign a separation agreement, which will include a general release in favor of the employer. When such a separation agreement is offered to employees over the age of 40, the agreement must contain certain legally required disclosures under the Older Workers Benefits Protection Act (OWBPA). For a release to be valid under the OWBPA as to any claim of age discrimination, the agreement must let the employee know that he or she should consult with an attorney, that the employee has a certain period of time (usually either 21 or 45 days) to consider the agreement, that the employee can rescind (or cancel) the agreement within seven days and that the employee may still file a Charge of Discrimination with the U.S. Equal Employment Opportunity Commission (but will not be able to recover damages).
For employers concerned about a complaint or potential legal action from a terminated employee or employers undergoing a reorganization or reduction in force necessitating the elimination of employees, it is vitally important to have a properly drafted separation agreement designed to avoid litigation and bring closure to the employment relationship.
For employees who have been separated where the employer has offered a severance or separation agreement, it is generally in the employee’s best interest to have the agreement reviewed by an experienced employment law attorney. Oftentimes, a severance agreement will contain a full general release in favor of the employer, meaning that, by signing the agreement, the employee may be waiving the right to bring any claim. Also, a severance agreement drafted by the employer is usually written to serve the best interests of the employer. As such, employees presented with a severance agreement should consider consulting with a lawyer to review the agreement to determine if more favorable terms or compensation can be achieved. An attorney can also review potential claims the employee may be releasing to determine if such claims have merit and, if so, whether those claims should be pursued or whether the consideration offered in the separation agreement is sufficient to address potential claims the employee is releasing.