New Jersey Severance Agreements: Waiver Provisions

Almost every severance agreement contains a waiver provision in which the employee agrees to waive the right to sue the company. These waivers are valid only if the employee makes a knowing and voluntary decision to sign.  

The Court's typically look at the following factors to determine whether a waiver is knowing and voluntary -- and should therefore be upheld:

  • whether the severance agreement is clear and specific
  • whether the severance agreement was forced on the employee or the employee was coerced or threatened  
  • whether the employee had a sufficient amount of time to review the severance agreement  
  • whether the employee consulted with an attorney and was encouraged to consult with an attorney
  • whether the employee had any input or opportunity to negotiate the terms of the severance agreement, and
  • the consideration offered to the employee as severance (compensation, continued benefits, and so on).

If the employee succeeds in having a waiver thrown out, the employee may have to repay the severance the employee got in exchange for signing.  

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