Severance Agreements 101: Everything You Need to Know Here in Minnesota

Severance Agreements 101: Everything You Need to Know Here in Minnesota

A severance agreement, also known as a Minnesota-compliant separation agreement, is a specific document that exists between employers and a departing employee. It will include a release of legal claims against the employer in exchange for compensation. This standard document is drafted in the employer’s favor, based on state and federal employment law requirements, and offered to terminated or laid-off former employees.

Even though you are presented with a severance package, it doesn’t mean you have to sign it or agree to the set terms and conditions. Since these documents are usually filled with legal jargon, it can be confusing. Take some time to read through this guide to learn everything you need to know here in Minnesota about severance agreements.

Protect Your Rights

An employer will encourage you to sign a severance agreement to waive your legal rights in exchange for financial compensation. These documents are commonly used to settle legal claims before deciding or even knowing you can pursue them. In this case, it’s even more essential to ensure the severance agreement offers fair and reasonable compensation, given the circumstance of your employment and following termination.

While they may try to pressure you into signing the day they offer it, you do not have to. It’s actually in your best interest to consult with an experienced severance agreement attorney to ensure your rights are protected and that you receive your just severance.

Beware of Non-Compete Clauses

One of the biggest reasons to work with an attorney is to protect your future ability to apply for jobs within your field and area. Often, severance agreements may try to add in a non-compete clause. This added detail could legally restrict your potential employment opportunities by not allowing you to work within your designated field or location for a period of time. These are just some of the common severance agreement issues that can arise, leaving you feeling trapped. 

While many Minnesota courts treat these arrangements unfavorably, severance agreements may still be enforced in specific situations. For example, your contract could mention that you are not allowed to speak about your previous employment. This limitation only benefits the employer.

Is It Possible to Rescind Your Severance Agreement?

If you have already signed a severance agreement, you may still have hope with a viable retaliation, discrimination, or harassment claim. Under Minnesotan law, you have 15 days from the date you signed to change your mind and rescind the agreement. Due to the time-sensitive nature of a rescission period, it’s vital to work with an attorney to review the severance agreement for any violation of your legal rights. While it’s not always possible, it’s best to seek immediate legal assistance to be sure.

Are You Eligible to Sue for Discrimination?

Suing for discrimination, retaliation, or harassment after signing a termination or severance agreement may still be an option. Discrimination in the workplace can surround any one of the following identifying factors:

  • Color
  • Creed
  • Race
  • Age
  • Gender
  • Nation origin
  • Family status
  • Disability 
  • Religion
  • Marital status
  • Sexual orientation

Many severance agreements may contain language that explicitly prohibits pursuing legal action against your employer for these circumstances. This is another reason why it is vital to speak with an attorney before signing for your benefit. You don’t want to accidentally sign away your right to sue for discrimination, especially if it led to your wrongful termination.

Are They Any Age-Specific Protections?

If you are over 40 years old, any severance agreement offered must meet certain qualifications to ensure the accord complies with the Age Discrimination in Employment Act (ADEA). These requirements include:

  • Easily understandable written language
  • No clause waiving future claims
  • Additional compensation beyond initial entitlements
  • Encouragement to seek an attorney for advice
  • 21 days to consider the agreement and seven days to revoke it

Thankfully, the Minnesota Human Rights Act protects employees from this discriminatory behavior, so you may still have time to file a claim against a previous employer. Learn more about workplace discrimination here.

Minnesota courts may also invalidate severance agreements that do not include a list of employees terminated and those retained during extensive layoffs. This detail, along with additional protections, help to protect workers’ rights.

Always Work With an Attorney for Severance Agreements

All severance agreements must be voluntarily agreed upon, with full knowledge of all contractual terms. If your document does not explicitly state clear information, the courts may even be willing to overturn the agreement. There are so many details that a knowledgeable employment law attorney knows to check for, including:

  • Confusing language
  • Discrimination
  • Hostile work environment
  • Age-related issues
  • Wrongful termination
  • Sexual harassment
  • Missing essential details
  • Whistleblower retaliation

The MSB Approach

The team of severance agreement attorneys at MSB Employment Justice has extensive experience fighting to secure employees’ just compensation and liberation from previous work environments. After thoroughly reviewing your agreement, we will identify any legal claims to see whether it is advisable to pursue legal action against your employer. Even if you cannot rescind your severance agreement or sue your former employer, we will still be able to provide a clear explanation of its terms and conditions to avoid problems in the future.

Seek Out Legal Support Today

Losing a job can be a challenging experience, and the last thing you want to deal with is whether or not you will be protected in your future endeavors. Before you decide whether or not to sign a severance agreement, it is best to seek legal counsel to learn everything you need to know here in Minnesota to ensure you’re protected against any injustice.

Severance packages can act as a bridge between your previous role and future employment, so it’s best to safeguard your ability to choose without consequence which direction is best for you. When you work with the team from MSB, our caring attorneys will strive to ensure you leave your job feeling empowered and protected.  
Connect with our team today to schedule a case consultation.

Legal Insights

Our attorneys work hard to distill complex employment law insights for you. With Justice News, we deliver important information that is meaningful and useful to all employees and employers.

Sign up to receive our newest insights.

Ross Stadheim

Ross Stadheim

Early on in law school, Ross Stadheim discovered his true passion — the plaintiff side of employment law. Embracing a chance to make a meaningful difference, he never looked back. Before becoming a founding partner at MSB Employment Justice, Ross garnered over $29 million in settlements and verdicts for his clients over the past 10 years at his previous firm. See Full Bio

If you want to learn more, click the button.