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 current job. This release protects 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 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 events 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. It 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 to be wary of what was said and done before signing the release. Let’s take a look at a quick example to explain this vital concept better. Let’s say that you sign a waiver 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 acts of defamation. It’s always advisable to speak with legal professionals before attempting to sue any employer.

Unknown Legal Claims

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. Suppose an employee signed a broad release agreement. After signing the release, you find out that a former employee has sued the company for not paying overtime to hourly employees. When 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 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 what you’ll gain from the agreement, whether that be in the form of benefits or a cash settlement. It 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 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. It 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 have seven days to revoke the agreement. If you change your mind two days after officially signing the deal, you can legally withdraw it. Again, this is to help ensure that employees are not getting coerced into any release agreement that they’re not entirely comfortable with.

Employers may not give all their employees these rights on purpose. Most employees don’t even realize that they have these legal rights at their disposal when signing a release agreement. That is why it’s so essential 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 adequately 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, they likely know you can sue them for much more than they’re offering.

If you have any questions, you can reach out to our Los Angeles workplace lawyer. Consulting with Mann & Elias about your employment and following termination will help you understand 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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