If you are ever fired or laid off, your employer may ask you to sign a release. The intention of this release is for you to give up your right to sue the company in exchange for a benefit you are not already owed—typically a severance payment. Read on for more details on if you should sign a release when fired.
Why am I being asked to sign a release when fired?
Even if your employer believes they’ve done nothing wrong, companies don’t like being sued. Often bad publicity and the expense of defending themselves against a lawsuit can be avoided by having the employee sign a release when fired. These waivers can prevent frivolous lawsuits from employees that may have been terminated for cause and are upset, but some employers—who may know you have cause to sue—will ask you to sign a release when fired in order to prevent valid claims from going to court. In this case, it’s important for you to know the law so you can safeguard your rights!
What am I giving up?
In some cases, nothing. If you don’t have any reason to sue, then the release is simply a formality. But if you believe you may have a case against your employer, it’s very important to check with an employment attorney before you sign a release when fired.
The release must tell you what rights you are potentially signing away—and you must be given the chance to review the agreement prior to signing it. If you are forced to sign a release when fired right away, with no time to consider your options, it’s unlikely your employer will be able to enforce the agreement.
What should I do?
First, read the entire document and make sure you fully understand what you are giving up. If you have any questions, don’t ask your employer for clarification. Tell your employer you need some time to decide, and contact an employment attorney.
Some employers include a clause in the release giving you time to consider and revoke the agreement. This protects the company from any accusations of coercion. If this is the case in your situation, it may be a good idea to take advantage of this time and consult an employment attorney!
Are there laws protecting me?
Yes! There are laws protecting employees from termination waivers, but this does not mean you should just sign a release when fired and worry about it if there is an issue. While these agreements can be set aside in a few situations, generally once you sign, the document is binding. A few of your protections are:
- In exchange for signing the release, you must receive something you are not owed anyway. For example, your employer cannot hold any money or property owed to you if you do not sign the agreement. In California, you must be paid everything you are owed at the time of termination.
- The release must clearly say what rights you are waiving by listing those laws.
- You must be given time to consider whether or not you want to sign. In general, it’s never a good idea to sign any legal document if you feel pressure.
- If you are asked to waive your right to sue for age discrimination, you have 21 days to consider whether or not to sign and, when you do sign, you have seven days to change your mind.
- You cannot waive your right to a federal wage and hour claim or a Family and Medical Leave Act (FMLA) claim—even if this is stated in the agreement!
Being terminated is an incredibly stressful event. Knowing and understanding your rights prior to being in the situation will go a long way toward protecting your rights if it does happen!
If you’ve been asked to sign a release when fired and have questions, contact ouremployment attorneys here for a free consultation.