What Employers Do Not Want You to Know About Release Agreements
A release agreement can permanently surrender valuable employment claims in exchange for severance pay or another benefit. The most important question is not simply how much the employer is offering. It is whether the payment fairly accounts for the rights, claims, and future restrictions contained in the agreement.
The Parzivand Law Firm, PLLC helps employees in Stafford, Sugar Land, and Fort Bend County, Texas, evaluate release agreements before signing. If you are facing a release agreement, the firm can explain the proposed waiver, identify the provisions requiring closer attention, and assess the agreement in light of your separation from work. Before trading potential claims for the offered severance, contact the firm to explore the terms of the exchange.
Release Language Determines What You Give Up
A release is a contract in which you agree to discharge specified claims against the employer or other identified parties. Its scope depends primarily on the written terms.
Under Texas law, a claim must fall clearly within the subject matter of the release, and the agreement must mention the claim being released. The document does not need to name every possible legal theory individually, however. Broad language may cover multiple claims connected to the employment relationship or termination.
The agreement may also release parties beyond the employer, including affiliated companies, owners, officers, employees, benefit plans, or other related entities. Before signing, identify both the claims covered and every person or organization receiving protection.
What Employment Claims Can a Release Cover?
A release may waive your ability to pursue certain existing claims involving discrimination, retaliation, compensation, contractual obligations, or other employment-related conduct. Whether a waiver is valid depends on the agreement and the law governing the particular claim.
A release usually focuses on conduct occurring before the date of execution. Federal age-discrimination law does not allow an employee to waive claims that arise after the agreement is signed. The agreement may refer to claims you have never asserted or may not realize exist. Evaluating its significance therefore requires considering what happened during your employment and separation, not merely reading the statutes listed in the document.
Severance Pay Is Only One Part of the Deal
The payment may be the most visible term, but the agreement can create obligations that continue after the employment relationship ends. Some common provisions may address:
Confidentiality
Statements about the employer or former coworkers
Cooperation in future investigations or litigation
Return of company property and information
Existing restrictive covenants
Employment references
Tax responsibility
Consequences of an alleged breach
These terms should be evaluated together. A payment may be less valuable if the agreement imposes burdensome cooperation requirements, broad restrictions, or significant consequences for an alleged violation.
Certain provisions may also be limited by federal law. For employees protected by the National Labor Relations Act, overly broad confidentiality or non-disparagement terms may unlawfully interfere with protected activity. The enforceability of any provision depends on its wording, context, and applicable law.
Employees 40 and Older Receive Special Protection
A waiver of federal age-discrimination claims must comply with the Older Workers Benefit Protection Act. The waiver must be knowing and voluntary and satisfy specific statutory requirements.
Among other things, the agreement must be understandable, refer specifically to the rights under the Age Discrimination in Employment Act, provide additional consideration, and advise the employee in writing to consult an attorney.
An individual employee generally must receive at least 21 days to consider the offer. A waiver presented as part of an exit incentive or other group termination program generally requires at least 45 days and additional disclosures. After signing, the employee must receive seven days to revoke the ADEA waiver. That revocation period cannot be shortened by agreement.
These rules apply specifically to waivers of federal age-discrimination claims. They should not be assumed to create the same consideration or revocation period for every employee or every type of release.
Can the Agreement Prevent an EEOC Charge?
A release cannot prevent you from filing a charge with the Equal Employment Opportunity Commission or participating in an EEOC investigation, hearing, or proceeding. An agreement attempting to waive those rights is unenforceable.
The release may still waive your individual right to sue or obtain personal relief for certain past discrimination claims. The ability to communicate with the EEOC is therefore different from the ability to recover money based on a released claim.
An employer also cannot require you to return severance consideration before filing an EEOC charge. Understanding these distinctions can prevent an agreement from appearing more restrictive than the law permits.
Release Agreements May Be Negotiable
A proposed release is not necessarily the employer’s final offer. Depending on the circumstances, you may request changes to compensation, payment timing, benefits, reference language, confidentiality obligations, cooperation requirements, or other provisions.
The strength of any potential employment claims may affect negotiating leverage. Other considerations include the employer’s reasons for offering the agreement, the employee’s compensation and tenure, and the restrictions the employer wants in return.
An employer is not required to accept proposed revisions. Signing immediately, however, ends the opportunity to seek different terms. A careful review of the severance agreement can help identify which provisions deserve priority before a response is made.
Documents concerning performance, compensation, workplace complaints, leave, accommodations, and termination may provide necessary context. Employees should preserve records they are lawfully entitled to possess without taking confidential or proprietary materials they are not authorized to retain.
Contact a Severance Agreements Attorney Serving Stafford and Sugar Land, Texas
Attorney Hessam Parzivand brings human-resources training and employment-law experience to reviewing release agreements. Having represented both employees and employers, he understands the protections employers commonly seek and the consequences employees may face after signing.
Before accepting a release, consider contacting a severance agreements attorney to schedule a consultation and discuss the proposed terms of the agreement. With offices in Stafford and Houston, Texas, the firm serves employees in Sugar Land and Fort Bend County.