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Exit Agreements & Severance Packages - Law Wise Professional Corporation
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Exit Agreements & Severance Packages

There are times when the employer and the employee find themselves at a crossroads: neither wants to maintain the employment relationship but they do not know how to communicate their intentions to one another. It is very important to end the employment relationship on mutually beneficial terms. These terms are often in the form of exit agreements, which contain non-disclosure, non-compete, or return of property clauses. This can be especially important for an employer when the employee is senior management or has direct contact with the company’s clients.

The purpose of an exit agreement is to protect both the employer and the employee from the risk of future legal action. These agreements are legally binding, given that their terms and conditions meet the necessary legal requirements of a contract. If the terms of the agreement are breached, then a party may have legal recourse against the breaching party.

 

 

What Does an Exit Agreement May include?

 

In an exit agreement, there may be various clauses meant to protect the employer’s business interests. These clauses usually take the form of non-disclosure, non-competition, or return of property clauses. Non-disclosure clauses prevent an employee from sharing confidential information. This type of clause is meant to ensure that the company’s information, such as client lists and patents, remain confidential.

 

Non-competition clauses are used to ensure that employees do not compete with their former employer in a similar profession or trade, for a specified amount of time. Return of property clauses are used to ensure that the employee returns all of the company’s property within that employee’s possession, such as cell phones, credit cards or company cars.

 

 

What a Termination Package May Include?

 

Many employers are in the habit of terminating employees without ensuring that the termination package is (1) legally compliant and (2) protective of the employer’s business interests.

 

When an employee is terminated without cause, they will be entitled to termination pay and, if applicable, severance, among other things. It is important for employers to ensure that the termination papers are in accordance with Ontario’s employment statutory and common law standards and rules to avoid possible litigation. It can be difficult to determine an employee’s entitlement for termination pay, as there are several factors, which can affect this entitlement.

 

 

How Law Wise Can Help EMPLOYERS?

 

It is important to ensure that the appropriate statutory and jurisprudential requirements are met, to avoid potential litigation in the future. Our employment lawyers can help draft the appropriate exit agreements and termination packages along with adequate releases to ensure that the departing employee will be least likely to come back with additional claims in the future.

 

Call us at +1 647 948 7819 today!

 

 

How Law Wise Can Help EMPLOYEES?

 

If you have already been presented with a severance package, it is important to have it reviewed so that your decisions are not muddled by emotions, personal considerations, and/or lack of knowledge. We are often called upon to assist in the facilitation of amicable employment separations and the determination of options in relation to various exit strategies that can maximize your financial position post-termination.

 

It is important not to sign an exit or separation agreement before speaking with an experienced employment lawyer, as many agreements contain onerous provisions that an employee may not recognize. For example, there may be a clause that terminates the benefits once the employee has signed a new agreement or a clause that requires the employee to sign away their right to sue for claims such as wrongful termination at common law.

 

If you have been offered a severance package and need it reviewed, talk to LAW WISE employment lawyers to discuss your options.

 

Call us at +1 647 948 7819 today!

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