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Are you trying to decipher a severance agreement and wondering what you might be giving up if you sign it? Clauses buried in the text could cost you money or restrict your future opportunities, but you don’t have to accept the first draft that lands in front of you.
The lawyers at Fagan McManus, P.C., know how to take these agreements apart and push for better results. Our team has built a reputation for going toe-to-toe with major employers and winning stronger terms for our clients. We bring the same fearless approach to every negotiation, no matter the size of the company on the other side.
If you’ve been handed a severance agreement in Dearborn, don’t just sign away your rights. Contact Fagan McManus, P.C., for a free consultation, and let us get to work for you.
Some Dearborn employers offer written contracts called severance agreements when they decide to lay off or terminate you. These agreements usually cover cash payments, the timing of those payments, and sometimes short-term benefits like health insurance. In exchange for these offerings, employers almost always require you to give up the right to bring legal claims tied to your job. Some of these agreements also include clauses that limit what you can say about the company or where you can work next.
Employers draft the terms of severance agreements to protect themselves, not you, so every word matters. If you read one quickly and sign it on the spot without thinking, it could cost you money, benefits, and career options. That’s why you should understand the basics of what’s inside to give yourself a better chance of negotiating terms that make sense for you.
Michigan law does not require employers to offer severance agreements, but it does shape how these contracts work. For example, state law explicitly counts severance pay as “remuneration” for unemployment purposes, which can delay or reduce unemployment benefits. In other words, if you lose your job and accept severance, you can’t collect unemployment until the severance period runs out.
Certain rights are off-limits when it comes to severance agreements. For example, Michigan law does not allow employers to require workers to waive claims for workers’ compensation in severance agreements. Additionally, Michigan courts only enforce severance agreements if they are made voluntarily, backed by fair consideration, and free of pressure or threats. This means a rushed agreement made under duress could provide grounds for a legal challenge.
Severance agreements in Dearborn have combinations of legal and financial terms that can affect you for years to come, sometimes in unexpected ways. It’s easier to decide when to push back or ask for changes when you know what to look for. Here are some common clauses you might see in a severance agreement:
Most Dearborn employers hand over severance contracts, expecting you to sign without question. They write the initial drafts to favor the company, so negotiation can really pay off. If the payment terms seem low compared to your years of service, asking for more makes sense. If the agreement limits your future job options through an overly broad non-compete or confidentiality rule, you have reason to challenge it. The same goes for broad non-disparagement language that could silence fair criticism.
Timing also plays an important role in severance negotiations. If you lose your job right before an annual bonus or large commission bump, you might have leverage to demand better pay terms. And if your termination carries the stink of discrimination or retaliation, negotiation is even more important since you give up potential legal claims by signing. An attorney can help you spot weak points in an agreement and push for changes you might not know you can demand.
Executives and professionals often receive severance agreements that differ from those offered to other employees. The financial packages might be larger, but the restrictions tend to carry more weight. High-level employees frequently see non-compete or non-solicitation clauses that last longer and have a broader scope. Executives might also have stock options, deferred compensation, or bonus plans tied into their severance packages. Those added elements require close review, since one poorly worded clause could erase years of accumulated value.
Because executives and other high-level professionals in Dearborn usually have more bargaining power, they can often push back and demand stronger terms. With higher stakes on both sides, detailed review and skilled negotiation matter even more.
Lawmakers at the state and federal levels are rethinking how severance agreements work. In 2023, the National Labor Relations Board ruled that broad confidentiality and non-disparagement clauses could violate employee rights under the National Labor Relations Act. That ruling is presently under review by the Sixth Circuit Court of Appeals, so its long-term effect is still uncertain.
At the state level, Michigan legislators introduced a bill in 2024 that would make severance pay mandatory. If it passes, this law would require employers conducting closures, relocations, or large layoffs to pay eligible workers one week of severance for every year of service. The proposal is still in committee and has not become law, but it shows growing interest in mandatory severance protections.
The pages of a severance agreement might look routine, but the terms can shape the future of your finances and your career. Without legal guidance, you might miss what’s buried in the fine print. An experienced lawyer can step in, push back where it counts, and fight for a deal that works for you by:
Before you sign a severance agreement, get the facts and protect yourself. Employers count on you accepting their terms, but you don’t have to settle for less than you deserve. The lawyers at Fagan McManus, P.C., have what it takes to challenge unfair contracts and fight for your future.
If you’re facing a severance decision in Dearborn, contact us now to arrange your free consultation.
