Offer Letters and Separation Agreements

Offer LetterOffer letters and Separation Agreements are two sides of the same coin. An offer letter is forward-looking. It defines the employer’s and employee’s respective rights and obligations on a going-forward basis. A separation agreement (or severance agreement), on the other hand, is rearward looking. It defines the parties’ rights and obligations post-employment. Both documents are vitally important and should be negotiated, drafted, and executed with extreme care. At Maya Murphy, we assist our clients in all aspects of employment law in New York and Connecticut, including offer letters and Separation Agreements.

An offer letter should set forth clearly and comprehensively the pertinent terms and conditions of employment: position, responsibilities, location, term, compensation (salary and bonus, if any), benefits (including vacation and whether accrued and unused vacation will be compensated upon termination), as well as any other, bargained for terms or conditions. Ideally, an offer letter should apprise both employer and employee of exactly what is required from each of them.

Most separation agreements contain restrictive covenants—confidentiality, non-solicitation, or non-competition clauses. The first two—confidentiality and non-solicitation—are typically non-controversial, as they often confirm pre-existing obligations owed an employer by a former employee. The last—non-competition—is usually a point of contention, as it directly impacts the employee’s ability to find a new position.

Do not be surprised by the length of a separation agreement. A federal statute called the Older Worker’s Benefit, and Protection Act requires the inclusion of extensive release language and such things as a 21-day review and 7-day revocation period. Here are some of the other things you should be on the lookout for:

  • Consideration: Make sure all of the severance benefits are correct and clearly stated. This includes severance pay, COBRA coverage, etc. Do not leave anything to inference or implication.
  • Confirmation that No Claims Exist/Covenant Not to Sue: Notwithstanding the comprehensive release language, some separation agreements will also require the employee to state that he/she is not aware of any factual basis to support any charge or complaint and that the employee will forego suit, even if such a claim exists.
  • Non-disparagement: Both sides often agree that neither will say anything to disparage the other. Sometimes (particularly in the financial industry), a separation agreement will contain a “carve-out” for an employer reporting to FINRA or the SEC. In such a case, it is important that the agreement states that, as of the employee’s separation date, the employer was not aware of any reportable event or information that would warrant comment or notation on a Form U-5.
  • Governing Law: Employment law does not travel well across state lines. For example, California law is very different from Connecticut law. Large companies will sometimes have their separation agreements governed by the law of the state where its headquarters is located, irrespective of the actual place of work of the departing employee.
  • Acknowledgment of Non-Revocation: An employee has seven days within which to revoke acceptance of a separation agreement. Some companies adopt a “belt and suspenders” approach and require the employee to acknowledge in writing a negative—that they have not revoked such acceptance.

If you need assistance with an offer letter or Separation Agreement situation, contact the employment law lawyers at Maya Murphy. Our law firm has three offices throughout the area, including one in Westport and two in New York City. Call 203-221-3100 or 212-682-5700 for help with your matter today.

Ideally, you should always consult with a lawyer who has experience in this particular area of employment law in the state where you are working before signing any documents. However, if you have already signed a non-compete and are now having issues after leaving that company, finding the right attorney is the first step toward evaluating your options. At Maya Murphy, we help employees challenge unreasonable non-competes that are impeding their ability to work in both New York and Connecticut.

The employment lawyers at Maya Murphy also assist employers with drafting non-competes that are enforceable and with pursuing legal action when they are violated.

Contact an Experienced Employment Law Attorney

Our attorneys have years of experience representing employment law clients in the states of New York and Connecticut. With offices located in New York City and Westport, we strive to provide large firm service while maintaining the small firm attention and accountability you deserve.  us today for assistance with your offer letter and separation agreement questions. Call 212-682-5700 for our New York offices or 203-221-3100 for our Connecticut office.