"I was fired, and my employer wants me to sign a "release" called Employment Termination Agreement. Should I?" Oregonians ask me this question more frequently. This post discusses the history of termination agreements and what to consider. Whatever you do, at least "sleep on it." Do not sign it while you are in the shock of termination. Evaluate the offer, and contact an attorney if you are unsure of what to do.
In 1987, I wrote an article saying Oregon employers would be smart to use termination agreements. I believed that most good lawyers could identify a potential claim against even private, non-union employers. Termination agreements made sense for employers because it is cheaper to eliminate the risk of an expensive lawsuit by paying the employee extra money for him or her to release or waive any rights to sue. 25 years later, employees have even more rights to sue employers, and employers frequently offer termination agreements.
An enforceable contract requires an offer, acceptance and "consideration." Consideration means that something of value is exchanged. It distinguishes an enforceable promise from, say, a gift. If I tell you I will give you my old car but, instead, donate it to a charity, you cannot sue me for the car, because you promised me nothing in exchange. So, for an enforceable employment termination agreement, the employer needs to give the employee something extra in exchange for the employee waiving his or her rights to sue.
The exchange typically involves extra money - how much money depends on a lot of factors, which I will discuss in a minute. Other terms we often see in a FINAL agreement (as compared to the one proposed by the employer) include:
- Letter of "reference" for the employee
- "Non-Disparagement," which means both sides agree not to say negative things about the other.
- The employee will not reapply for employment.
- Employer releases any claims against employee, too.
- Confidentiality about the agreement, the worker, and the business.
The factors to consider in determining the amount include the following:
- Does the employee have valid legal claims against the employer supported by evidence?
- Does the employer have any legal claims against the employee?
- How many years of service?
- What's in the personnel records? Has the employer documented problems?
- How likeable are you? Will co-workers support your side of the story?
- How likeable is the boss?
- What's the financial condition of the employer?
- Does the employer have insurance against employment law claims?
So, please consider the above if the employer fires you and asks you to sign away your rights. It's probably worth buying an hour of time with a qualified attorney to talk through your options. At a minimum, the discussion could provide you with peace of mind. On the other hand, the attorney might identify valid claims that could increase the monetary compensation by a lot.
Jeff Merrick, Oregon Trial Attorney
Injury & Employment Law
503-665-4234
The above is not legal advice. I cannot give you sound advice without knowing more information. It is intended to raise some issues for you to discuss with your own lawyer.
