Dealing w/ Draconian Severance Contracts?

outOfWork asks: "I've just been recently announced that I was getting laid off from yet another dot-bomb company. I have received my papers and they are simply dragonian! I understand the need not to disclose any information on the company I was with (that's only natural; I have also signed a similar paper when I started working there anyways), however the papers they are requesting me to sign do include such terms as not being to sue (should I require to). I thought suing someone or a company was a fundamental freedom that we enjoyed here in Canada. If I do not sign these papers, they do mention that I will not be entitled to my severence's package. I'm fairly certain that several companies do these sorts of things, however do they have the right to do this? This company has had a bad reputation when it comes to how HR deals with certain issues and I'm wondering if they might be trying to pull a fast one on us. With the market being what it is, I could sure use that severence's package. Your input would be very welcome."

Comments

be pragmatic

[topham]

Be pragmatic.

I don't support crap like this, but ask yourself a few questions first. Do you believe you have a need or cause to sue the company? Laying you off isn't generally a cause.

Is the severance package more than is required by law? check your provincial, or federal labour code (certain companies, Banks for instance, have to meet only federal labour code.)

If the severence package is more than you would normally be entitled to when layed off, and does NOT include any further requirements as to confidentiality, non-compete etc more than your initial contract then you may as well sign it.

On the other hand, if the non-compete/confidential information clauses are more significant than what you signed when you got your employement you probably should NOT sign such an agreement.

Re:be pragmatic

[geekoid]

may the severence check is going to bounce, and the company knows it?
Or perhaps they have been exposing him to toxic chemicals, and he won't know for years?

I am not a Canadian lawyer,

[io333]

however,

It seems to me that if you are *not* already entitled to such a severance package, that they are, in essence,

making you a settlement offer

which you may or may not choose to accept.

However,

if you were already entitled to the package, and they suddently would not give it to you without this additional condition,

then you could possibly, at a future date, argue during the suit that you were forced to agree to the additional condition while under some sort of duress,

in which case the document may be held to be invalid. But this is risky.

Maybe instead of the collective *cough* wisdom of Slashdot, might I suggest that

you see a real lawyer instead?

it'll also be fraud

[Trepidity]

When you accept the money you fraudulently signed for.

Advice From A Fellow Canadian Who's Been There

[Snork Asaurus]

Damn, I wish that I had read this earlier - I hope that you are still "listening". Slashdot is a good place to look for some things, BUT NOT LEGAL ADVICE, especially about an important issue like this.

Let me preface this by saying that I am not a lawyer and this post does not constitute legal advice.

I am Canadian and 5 1/2 years ago I went through what you are going through . The most important piece of advice that I can give you is SEE A LAWYER. If you don't know one, get a reference to a good lawyer from friends or family. It won't cost you that much for an initial consultation (maybe $80-$150). It is worth it's weight in gold for the piece of mind of knowing where you stand. Once you know exactly what your rights and the employers obligations are, you can make an informed decision about signing.

The situation that you describe is common these days - the company is looking to limit all liabilities with respect to you employment in order to avoid being blindsided with a costly lawsuit in the future. I worked for a company where that (lawsuit) happened and it cost them big time both financially and in terms of distraction of key management. In exchange for that they offer you a severance package over and above the legal minimum, (which, IIRC, here in Ontario is a paltry one week's pay for each year of service plus vacation pay outstanding). You are legally entitled to your provincially mandated minimum and under no obligation to sign ANYTHING for that minimum.

I don't know what you have been offered but it should be at least one month's pay for each year of service plus vacation pay outstanding. Still, do not sign based on what I just said - get a lawyer to review the terms and advise you. Your lawyer will have a big fat reference book which lists settlements in Canada by industry/job classification/experience. He can tell you whether the financial terms are 'fair' and whether the legal terms are reasonable. The employer is required to give you some time for you to get their 'offer' reviewed by a lawyer. You should not have to sign 'on the spot'.

Also, note that you have a golden one-time (per layoff) opportunity to direct a fairly large chunk of you severance package into your retirement savings (over and a above your allowable annual amount) without income tax deductions under these circumstances. Get the info from your employer or Revenue Canada. You will never see that money - it goes from directly from your employer into the retirement plan that you designate BUT IT IS TAX FREE and once of the few 'gifts' that you'll get.

Best of luck finding a job. Layoffs suck and are a jolt to the system but always keep in mind that you will get another job and probably be better off for it.

Finally, and in case I didn't mention it, this post does not constitute legal advice - please GET A LAWYER TO REVIEW THE PACKAGE AND ANYTHING THAT YOU WILL SIGN !