Yesterday’s Advisor covered the legal pitfalls of layoffs. Today Attorney Bennett Pine gives you his take on release agreements, and we introduce an extraordinary collection of checklists that helps you through the whole range of HR challenges.
Consider requiring employees to sign releases in exchange for receiving severance pay, Pine recommends. Although such agreements must be carefully drafted and executed to stand up, they offer valuable protection for employers.
Whatever the cost of additional severance, it is more than offset by the avoidance of litigation, he says. Pine is a shareholder in the New York/Newark office of law firm Anderson Kill & Olick, P.C. He made his remarks on the mondaq website.
What Release Agreements Can Stipulate
Although circumstances vary, release agreements typically stipulate that employees agree they will not:
-Sue the employer for discrimination or any other claim
-Disclose confidential information about the employer
-Disparage the employer
-Disclose the details of the release to anyone other than their spouse, attorney, or financial advisor
Such agreements should also include, says Pine, two additional clauses:
-The employer, by entering into the agreement, has not conceded liability in any way.
-The employee will forfeit the enhancements in the agreement if the employee breaches the agreement.
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Consideration/Enhancement
To make the release binding, employers must offer “consideration.” The typical consideration is severance over and above what is already due to employees.
Severance is typically paid out either as a lump sum or salary continuation. It may, however, also be something else—for example, helping the employee with the cost of COBRA continuation, offering outplacement counseling, or allowing the employee to keep a company car.
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RIFs Are Not Accidents
The key point to remember, Pine says, is that reductions in force (RIFs) are planned events, not accidents. To avoid liability, employers must plan ahead, considering all the potential legal challenges that might arise.
That’s good advice for any HR venture, but how do you know what to look out for? Here’s the best option—audit to identify problems before they get serious. To do that right, you need audit checklists, and there’s good news: BLR’s editors have already written them—for all of the most challenging areas of HR.
Why Checklists?
Why are checklists so great? Because they’re completely impersonal, and they force you to jump through all the necessary hoops, one by one. They also assure consistency in how operations are conducted. And that’s vital in HR, where it’s all too easy to land in court if you discriminate in how you treat one employee over another.
The program our editors recommend is BLR’s HR Audit Checklists.
Just as an example of how it compels thoroughness, it contains not one but three checklists relating to recordkeeping and digital information management. One lists 34 types of data and also covers confidentiality, emergency planning, efficiency, compliance with laws, and safety. You’d likely never think of all those possible trouble areas without a checklist, but with it, just scan down the list and you instantly see where you might get tripped up.
In fact, housed in the HR Audit Checklists binder are dozens of extensive lists organized into reproducible packets, for easy distribution to line managers and supervisors. There’s a separate packet for each of the following areas:
-HR Administration (including communications, handbook content, and recordkeeping)
-Health and Safety (including OSHA responsibilities)
-Benefits and Leave (including health cost containment, COBRA, FMLA, workers’ compensation, and several areas of leave)
-Compensation (payroll and the Fair Labor Standards Act)
-Staffing and Training (incorporating Equal Employment Opportunity in recruiting and hiring, including immigration issues)
-Performance and Termination (appraisals, discipline, and termination)
HR Audit Checklists is available for a no-cost, no-risk evaluation in your office for up to 30 days. Visit here and we’ll be happy to arrange it.