Leveraging Severance Pay in Massachusetts

One of the misconceptions about severance pay commonly held by Massachusetts employees is that their employer owes them severance if they don’t leave the job voluntarily.  In certain circumstances an employee may have a contract that provides for severance pay in the event of termination. Alternatively, an employer may have agreed at the beginning or during the course of the employment relationship to give the employee a certain amount of severance pay upon termination.  If an employer hasn’t already agreed to pay severance pay and the employee is terminated, there is no obligation on the part of a Massachusetts employer to give severance to the employee.

If the employee isn’t legally owed severance pay, why would a Massachusetts employer agree to it?  In one word: leverage.   The employee’s leverage to ask for severance pay varies from case to case.  The longer the employee has worked for the company, the greater the leverage.  As an example, an employee who worked for a company for only six months doesn’t have great leverage.   A longer term employee has greater leverage in requesting severance pay.

Employees who sign severance agreements are typically exchanging a waiver of all of their rights under Massachusetts state and federal employment laws in return for the severance pay.  The stronger the potential claims against the Massachusetts employer, the greater the employee’s leverage.  An employee who has grounds for a claim that he or she was terminated because of age may have strong leverage to negotiate a severance pay agreement.  Likewise, employees who experienced discrimination on the basis of their gender, sexual orientation, religion, national origin, ancestry, color or disability (both physical and mental) may have strong leverage.  In those circumstances an employer may want to limit the risk that an employee will file a lawsuit.  Employees who have experienced sexual harassment on the job may also have leverage.

An employee who has been terminated from his or her job in Massachusetts should not wait to determine whether he or she has the leverage to ask for severance pay.  There is a short time period for filing claims with the Massachusetts Commission against Discrimination and once the time or filing a claim has expired, the employee loses his or her rights.

If you have a specific question about severance pay, please call Boston, Massachsusetts labor and employment lawyer Maura Greene at 617-936-1580.