Should You Sign a Release When You Lose Your Job? | Mann & Elias
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Should You Sign a Release When You Lose Your Job?

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Sometimes your employer may ask you to sign a release when you leave your existing job. This release is meant to protect the company from any future lawsuits. However, it’s not always in your best interest to sign it. We’re going to go over exactly what this release entails and when you should consider signing one.

What Is A Release?

An employment release is a formal agreement that a former employee will not sue the employer. Essentially, the former employee is waiving their right to take legal action against the company in the form of a wrongful termination lawsuit.

Why would a person agree to do this? Former employees are traditionally offered an exchange of benefits for their signature on a release waiver. In most cases, the benefit is a set amount of money that the employer will pay to alleviate themselves of any future legal battles.

Narrow Releases

Releases can be as complex or as narrow as both parties agree to. Under the circumstances of a narrow release, the former employee agrees to waive their legal rights to select circumstances or issues. These rights may be for something like severance pay or payment of commissions. In this scenario, the employee may not sue for restitution of these payments. However, they can sue for other circumstances like discrimination.

Broad Releases

In some cases, both a company and a former employee may agree to a broad release. This typically encompasses a person’s release of all their rights to sue a particular company about the topic of employment. It’s no wonder that many employers push a broad release for the sake of limiting any legal backlash from a former employee.

Events Preceding A Signed Release

All Los Angeles unfair firing lawyers will advise you that signed releases are only good for the actions prior to when the release was signed. Let’s take a look at a quick example to better explain this important concept. Let’s say that you sign a release with your employer regarding a layoff.

After the release is signed, your employer proceeds to provide false and harmful information to other potential employers who call for a reference. Since the defaming actions of your employer happened after you signed the release waiver, you’re still capable of suing them over their actions of defamation. It’s always advisable to speak with legal professionals before attempting to sue any employer with whom you’ve previously signed a release.

Unknown Legal Claims

You may be advised to be very careful when signing a release. Signing a release can bar you from your legal right to claims that you didn’t even know existed when signing one of these agreements.

For example, let’s say that you signed a broad release agreement with your employer. After signing the release, you find out that a former employee has sued the company for not paying overtime to hourly employees. At the time you signed the release, you didn’t know that you were classified as an hourly employee and entitled to overtime. Unfortunately, signing the broad release waiver can eliminate your right to sue the company for not paying you overtime.

Factors To Consider When Signing A Release Agreement

Before you take up the pen, it’s a good idea to consider the following factors:

What Rights Are You Giving Up?

Legal counsel will assist you in understanding the legal jargon that is included in your release agreement. You must know exactly what rights you’re giving up in the release agreement. You don’t want to waive any rights that you may need later on down the road.

What Benefits Are You Receiving?

Lawyers can also help you in determining what benefits you can receive from signing a particular release waiver. You need to know exactly what you’ll gain from the agreement, whether that be in the form of benefits or a cash settlement. This will assist you in determining whether or not the benefits you receive will outweigh your right to sue the company.

What Consideration And Revoking Period Are They Offering You?

There are select time periods that your employer must legally allow when it comes to a release agreement. They must provide you with 21 full days to consider the agreement terms. This is to prevent an employer from coercing a former employee into an unfavorable release agreement.

In addition to the 21 days of initial consideration, you are legally entitled to a 7-day period to revoke the agreement. This means that if you change your mind two days after officially signing the agreement, you can legally revoke it. Again, this is to help ensure that employees are not being coerced into any release agreement that they’re not fully comfortable with.

Employers may not give all their employees these rights on purpose. In fact, most employees don’t even realize that they have these legal rights at their disposal when it comes to signing a release agreement. This is why it’s so important that you enlist the help of a skilled attorney before signing any legal release document.

Always Think It Through

It’s never a good idea to jump on signing a release agreement without properly thinking it over. You need to realize that your employer is only going to offer an amount they consider reasonable. If they offer a large amount off of the bat, it’s likely that they know you can sue them for much more than they’re offering.

This is why it’s important to consult a Los Angeles workplace lawyer when you’re faced with this decision. Consulting with Mann & Elias about your employment and following termination will help you get a better understanding of how much compensation you are entitled to, and whether or not you should sign your rights away with a legal release document.


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