News of the massive tech layoffs have been dominating headlines for weeks. About 18,000 people at Amazon and 12,000 at Googles parent company Alphabet. Roughly 10,000 at Microsoft. An estimated half of the 7,5000 workers at Twitter. And social media feeds have been filled with juicy details about the severance packages, including information on the legal documents employees have to sign before they get their payout.
Its left some questioning the fairness of such documents. But experts say these non-disparagement agreements are pretty standard.
Severance packages can be a godsend for employees affected by layoffs, giving workers some financial cushion as they begin their job search. Most Americans are at-will employees, meaning that severance isnt always required, though some states do require payouts to certain types of workers. But while companies can opt to be fairly generous with packagesTwitter and Salesforce, for example, are providing up to three and five months of pay and benefits, respectivelythere are typically some strings attached.
The soon-to-be former employees are usually asked to sign some type of separation agreement that includes a non-disparagement clause, as well as a liability release. In order to receive severance, you have to sign an agreement. Companies want them signed so employees cant sue them, says Amy Spurling, CEO and co-founder of Compt, which offers employee perk stipend software for HR departments.
Spurling, who has been in the HR industry for more than two decades and is very familiar with the layoff process, tells Fortune that in order to get employees to sign such an agreement, companies have to offer compensation. Thats essentially why these are always tied to severanceits standard operating procedure.
A non-disparagement is a very, very standard clause. Ive never seen a release agreement that didnt include it, Spurling says.
How non-disparagement agreements work
While this paperwork is standard, it still pays to understand how the process works. Employers will usually discuss the terms of any agreements at the same time that they meet with a worker to discuss the layoff, says Texas-based plaintiff attorney Omar Ochoa. Employers typically want to get the employees agreement signed prior to paying out any severance amounts but not necessarily before a layoff is effective.
Non-disparagement agreements are not the same as a non-disclosure agreement (NDA). Essentially non-disparagement typically ensures you wont write or say anything negative about the company. Now if you knew about systemic discrimination happening at the company or something illegal, that usually falls outside of a non-disparagement agreement. Its not a gag order.
You still have recourse as an employee, Spurling says. An NDA is much stricteryoure basically going to have to just pretend like nothing ever happened, she adds. Many times in cases of alleged sexual harassment, for example, an employee may be required to sign an NDA as part of a settlement agreement, after which theyre prohibited from talking about any of the allegations.
But Spurling says non-disparagement works both ways. She recommends that if its not in the agreement, impacted employees should ask their employer for the terms to be mutual. I think thats a very reasonable ask on the employees side. If Im not going to say bad things about the company, they also shouldnt say bad things about me, Spurling says.
Employees also need to look carefully through any separation agreements for any type of non-compete clause that may limit their ability to continue working in a specific role or industry. Thats a massive red flag, Spurling says. Whatever severance money theyre offering you is likely not enough to start an entirely new career, so make sure the non-compete isnt barring you from continuing your career at another company.
In addition to looking through the agreement for non-compete language, Spurling recommends checking for any new non-solicit clauses as well. These typically bar you from generally hiring or attempting to hire your former colleagues. If this does exist in the agreement, its something that could be worth trying to negotiate.
Its very important that an employee understand all provisions of any agreement, Ochoa tells Fortune. Reading the agreement in its entirety is the minimum. And make sure to ask questions if you dont understand anything, even if its just a specific word or phrase that may be confusing.
Better to ask now than repent later because these agreements are legally enforceable. Employees who sign agreements should assume the employer is prepared to enforce it, Ochoa says. In many cases, monitoring the employees compliance and litigating any violations is likely not financially feasible, so the agreement becomes more of a scare tactic, or deterrent, in hopes that the employee will comply.
But if the violation is severe enough, or if the amount of money at issue is substantial, the company may take steps to enforce an agreement. This is typically more common with executives and higher-level management than the average rank-and-file worker though.
For the average worker, getting a lawyer to review the agreement probably isnt necessaryand it may not even be feasible given the financial and time constraints facing workers involved in a layoff.
The bottom line is, if you were let go and you arent in a management position just sign the paper and take the money, Spurling says.
If you have a dispute and a really good cause to sue the company, then it may be worth talking to an employment lawyer before signing anything. But Spurling adds that the reason needs to be goodit cant be simply because youre upset you were let go.
Not signing the paperwork to stick it to the company means youre missing out on compensation. If there arent any red flags, sign on the dotted line and take the money, she recommends.
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