Job loss can be a major hardship for professionals. The more skilled an individual is, the harder it may be for them to move into a new position quickly after losing a job. It is common practice for professionals to negotiate severance packages when they accept new jobs.
Some employees expect an offer of severance in scenarios where they face layoffs or other surprise terminations. In some cases, workers may go so far as to sue their employers because they do not receive the severance pay that they expect.
Businesses intending to terminate a specific professional with a severance package included in their contract or preparing for layoffs as part of a restructuring effort may lead to litigation from workers who insist that they deserve severance pay.
How can businesses handle the claims of recently-terminated workers?
With an understanding of the law
Sometimes, employees misunderstand the law. Technically, Texas state statutes do not entitle professionals to severance pay. In most cases, employers have an obligation to uphold their contracts.
However, if workers do not negotiate severance pay as part of the onboarding process, they may not have grounds to demand a severance package at the time of their termination. Businesses may be able to respond effectively to demands for severance pay or threats of litigation by explaining the legal reality to recently-terminated workers.
With appropriate documentation
Even when employers have signed contracts that include severance pay provisions, it is sometimes possible to justify the decision to withhold a severance package. Employment contracts usually have clauses protecting them from severance obligations after terminating workers for cause.
If an employer intends to terminate a worker for poor job performance or multiple disciplinary issues, than it may be possible to document the situation. Keeping internal records of every write-up and poor performance review can make it easier for an employer to defend against claims for severance pay after terminating employees.
Having support when reviewing contracts and preparing for major employment transitions can help businesses avoid employment litigation. In many cases, it is possible to legally deny or limit severance pay because of a worker’s prior conduct or job performance. Businesses may need to be ready to go to court to validate the decision to deny severance pay to a former employee.