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How An Employee Separation Agreement Protects Your Business

If your company was forced to let an employee go, your company could experience problems if the employee decides to retaliate. Employees who are let go often feel a lot of anger and resentment, and this can lead to a variety of problems for your business. If you want to avoid problems with this person in the future, you might want to create an employee separation agreement.

What Is an Employee Separation Agreement?

An employee separation agreement is a contract that is commonly used in situations like this. The agreement basically offers the employee a package after being fired or asked to leave. The package may include money or other types of perks. The goal of it is to satisfy the person so that he or she does not cause any problems for your company in the future.

For the agreement to be valid, it must be in writing and signed by you and the employee that is leaving your company. Additionally, you must follow through with giving the person everything you agreed to in the document. Once you complete these steps, the agreement is valid.

One key factor you must include in the agreement is that this agreement is final. In other words, the employee is restricted from slandering your business in any way, suing your company, or asking for more money. If this person signs the agreement, he or she cannot legally do any of these things afterwards. This type of agreement protects your company, and it also offers compensation to the employee leaving your business.

What Problems Could Potentially Occur?

Without an agreement like this, the employee you fire could decide to sue your company for the way you handled the event, or the employee could make things up about your company and spread negativity about your business to others. The employee could also tell company secrets to your competitors. If any of these things happen, your business could suffer a lot. With an employee separation agreement, you will have a contract in writing that prohibits these things.

Even with an agreement, the employee could still do any of these things, though; however, the employee could get in legal trouble if he or she does this. If this happens and you have an agreement, you could sue this person for the troubles he or she caused. The downside to this is that any type of lawsuit will become public knowledge, and lawsuits have a way of causing people to think negatively about a business.

What Is the Best Way to Avoid These Problems?

The best thing you could do in this type of situation is contact a business litigation lawyer. This type of lawyer specializes in settling disputes that businesses have. A business litigation lawyer could help you draw up an employee separation agreement that fully protects you, and this is important.

If you get an agreement and still have problems with this employee, your lawyer could help you settle the issues too. A business litigation lawyer could help you with every step of this process, including determining all types of risks and protection strategies for each of the risks.

A lot of businesses fail to create employee separation agreements after employees leave, and this opens up a lot of risk for these businesses. If you want to avoid problems like this, you will need to make sure you create a legal, valid agreement that will hold up in court and offer all the protection you need.

If your business is going through a situation like this or any other type of problem, contact a lawyer about business litigation.