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Pennsylvania Employment Law Blog

Should an employee sign a severance agreement?

When an employee is terminated, an employer may offer a severance agreement that sets forth pay and benefits in return for a worker surrendering something, such as the right to sue. Some things should be carefully considered when employers propose severance agreements.

Employers are not required to offer these agreements and employees are under no obligation to sign them. Employees may wish to negotiate for better terms or reject the agreement so they can file a lawsuit. While considering these agreements, an employee should carefully review terms that should be in this contract.

Non-compete agreements for current employees

Some employers try to have new or prospective employees enter non-competition agreements before hiring. However, they may also have existing employees enter a non-compete clause in new employment contracts. Employers offer these agreements to avoid disputes over employment terms and to protect themselves after a worker leaves or is terminated. Businesses may rely on non-competition clauses to assure that a worker does not disclose confidential information after they leave that employer or use this knowledge while working on their own or for a competitor.

Pennsylvania is one of at least 16 states where employers must provide "consideration," or something valuable, to existing workers when they seek a binding non-compete agreement. This consideration may not be limited to ongoing employment at that business.

Reacting to a job loss

Suddenly losing a job may have a substantial financial and emotional impact. It is important to act quickly, or substantial benefits and rights may be loss. Negotiating effective severance agreements may be important.

Employees who are laid off and did nothing wrong may be entitled to severance pay. This is a specific amount of money paid to employees who are terminated because of business restructuring, personnel cuts or other reasons unrelated to their conduct. Obtaining a copy of the employee handbook or any employment agreement is important to determine whether there is a right to severance pay.

Prescription for medical compensation

Compensation is an important component of working at a hospital, health care system or a physician group. Negotiating employment contracts for medical professionals needs to address several compensation considerations.

Compensation should be comparable to other medical professionals with similar skills and experience in the locality. Survey reports on compensation and speaking with colleagues can help provide important information. The base salary should be guaranteed as long as possible without adjustment. This may be one year for practitioners just coming out of training. Doctors joining a health care system that is part of a practice may be able to negotiate a longer time, such as three to five years.

Federal noncompete bill introduced

A noncompetition agreement can prevent a person from seeking more lucrative and satisfying employment. However, these consequential clauses may have been contained on one form or box that was checked without meaningful review when employment contracts were signed. A federal bill may help some workers but has serious drawbacks.

Noncompetition agreements were traditionally used with high-echelon employees to prevent them from revealing or using confidential work-related information. However, almost 20 percent of employers are using non-competes to restrict a broader ranger of employees.

Getting a severance agreement after layoffs

Employees subject to lay-offs and other terminations are dealing with a multitude of emotions and insecurity while promptly clearing out their desk. During this stressful event, and even earlier in companies that are restructuring or engaged in layoffs, employees should consider the contents of severance agreements.

Former employees, a trusted manager or longtime co-worker may be a good source on an employer's layoff policies. If a reorganization may be underway, the human resources office may provide information on their standard severance package. Employers covered by unions may have mandated severance packages.

Employers may cash in on side hustle

Employees may use their free time to seek profit from their interests or hobbies by writing a book, developing a new video game or making pottery or jewelry. Social media and the internet almost limitlessly expand the opportunity to market these side hustles and performing other outside work such as blog writing. Employees need to carefully review existing employment contracts and negotiate updated agreements to deal with these activities.

An employer may believe it owns any work done within the scope of the employee's job and seek its profits. Employers can also jeopardize employment because of this work.

Things to know about noncompete and nondisclosure agreements

Noncompetition and nondisclosure agreements are becoming more prevalent in many businesses and professions. Potential or current employees should pause and carefully consider these clauses when they are offered in an employment contract or at another time.

Through a noncompetition agreement, an employee agrees not to directly compete with their former employer for a reasonable time period and within a geographic area. A nondisclosure agreement restricts a person from disclosing information in subsequent jobs that their former employer classified as proprietary or confidential such as technology, new products, business plans, finances and sketches.

How the #MeToo movement has affected executive agreements

Businesses have made changes of all kinds to their practices and policies since the #MeToo movement put sexual harassment in the spotlight. The issue has become an important one for employment agreements, especially those geared toward top executives.

Protection from claims