Severance and Change of Control (Golden Parachute) Agreements
Executive Compensation Lawyers Representing Clients in the Greater New York City Area
Employment is at will in New York. This means that your employer can terminate you for no reason or any reason, as long as it does not violate the law or public policy. However, the termination of executives in New York is often accompanied by a written severance or change of control (golden parachute) agreement. These agreements are meant to ease the transition, but they often include waivers of certain rights and certain obligations. Often, these agreements waive your right to sue for discrimination or other reasons. You should consult an experienced New York City executive compensation lawyer at Phillips & Associates before signing such an agreement.
Rights Under Severance Agreements
In most cases, there is no general principle that severance must be paid upon termination of employment. However, there may be circumstances in which severance must be paid, due to terms in the original employment agreement or the circumstances in which severance is offered.
The employment agreement may state that you are entitled to severance as an executive. This might be a clear entitlement regardless of circumstances, or it might be contingent on how long you were employed or other factors related to your termination. Additionally, even if there is no entitlement under your employment agreement, you could be entitled to severance when an employer has a clear policy of paying severance upon termination, or has made these payments to every other executive. An employer is not entitled to discriminate with regard to severance payments based on such elements of identity as race, color, gender, national origin, or religion. If you were the only female executive at your company, and the male executives who have left were offered severance upon leaving, while you were not, an attorney may be able to help you pursue damages under the anti-sex discrimination provisions of Title VII, the New York State Human Rights Law, or the New York City Human Rights Law.
Sometimes executives are asked to leave because they are aging. Age discrimination against people who are 40 or older is unlawful under the Age Discrimination in Employment Act (ADEA). Furthermore, under the federal Older Workers Benefits Protection Act (OWBPA), employers need to follow certain procedures and include certain provisions in severance agreements if they are asking employees to waive their claims under the ADEA. Among other things, the waiver needs to be clear, mention the ADEA by name, advise you to talk to an attorney prior to signing, give you at least 21 days to decide whether to sign, provide consideration for the waiver of your ADEA claim, provide a 7-day revocation period after signing, and let you know about any class or group covered by a buyout program or reduction in force. When a company fails to comply with any of these mandates, it may be possible to file an age discrimination claim even if you signed a severance agreement.
Golden parachute agreements are clauses in employment contracts that set forth the payout that you will get if you are terminated or forced out of an organization before the end of your contract term. Many high-level executives receive substantial payouts under such agreements. The golden parachute is often the way that the business is able to recruit a high-profile or experienced executive to work at the company. When a business is struggling, the board of directors may believe that stability and good finances are possible with the right leadership, and the golden parachute is used as an enticement. For example, some executives are offered 6-12 months' salary and a pro-rated bonus in case of termination. However, in some cases, executives are not paid what they were promised, and they may have a basis to sue for breach of contract or other reasons.
Retain a Skillful Executive Compensation Lawyer in New York City
A skillful employment attorney can help make sure that you are treated fairly and represent you in case of mistreatment in connection with your termination. If you are concerned about severance or change of control agreements as an executive in a New York City workplace, you should consult an experienced employment litigator. Contact Phillips & Associates at (866) 229-9441 or through our online form. We handle employment litigation in the boroughs of the Bronx, Queens, Brooklyn, and Manhattan; the counties of Westchester, Nassau, and Suffolk; as well asNew Jersey, Connecticut and Pennsylvania.
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