What Should an Employment Severance Agreement Say? Courts Create Confusion For Employees
Lower courts have interpreted a 2012 ruling from the Massachusetts Supreme Judicial Court, Crocker v. Townsend Oil Company, to require that any severance agreement explicitly reference the “Wage Act.” Otherwise, despite the release, the employee would still be allowed to sue his or her employer for any unpaid wages.
But a Massachusetts federal court had held that a release need not be so specific to cut off an employee’s rights. So long as the release generally mentions unpaid wages, that’s good enough, said the judge. In a decision from Judge Timothy S. Hillman in the case MacLean v. TD Bank, he held that “the goal is to ensure an employee does not unwittingly waive those rights [under the Wage Act]” so a release is sufficient as long as it “makes it clear that an employee is waiving those rights.”
What does this mean for Massachusetts employees? It means that it is even more important to have a severance agreement reviewed before you sign it. Employers may sometimes offer a severance agreement that does not compensate an employee for unpaid wages, or for violations of other rights like accommodation for disability, discrimination, or sexual harassment.
If you believe your rights as an employee may have been violated, contact us for a complimentary consultation.
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