When leaving a job, many employees sign severance agreements that outline terms for receiving pay or benefits after their departure. While these agreements offer financial support, they often include restrictions that could impact your future work opportunities. Knowing what these restrictions mean helps you make informed decisions.
Non-compete clauses
Many severance agreements include non-compete clauses, which restrict you from working for a competitor or starting a similar business for a specific time in a defined geographic area. In Pennsylvania, these clauses must be reasonable in scope and duration to be enforceable. If the restrictions are too broad, they could interfere with your ability to earn a living.
Non-solicitation agreements
Non-solicitation agreements may prevent you from contacting former clients or coworkers to join your new business or employer. These agreements protect the company’s relationships and workforce but may limit how you grow professionally after leaving your job.
Confidentiality agreements
Most severance agreements include confidentiality clauses that prohibit you from sharing proprietary information or trade secrets. While these clauses do not directly prevent you from working, they could limit the types of roles you can take if they require knowledge similar to what you used in your previous position.
Waiver of claims
Severance agreements often require you to waive your right to bring certain legal claims against your former employer. While this does not restrict your ability to work, it is important to understand how it affects your rights before signing.
Understanding enforceability
In Pennsylvania, the courts review the fairness of severance agreement restrictions. If an agreement excessively limits your ability to find new work, it may not hold up in court. However, abiding by fair and reasonable restrictions is generally required.
Severance agreements can include clauses that impact your ability to work in certain roles or industries. By understanding these terms and their potential effects, you can navigate your next steps confidently and protect your ability to earn a living after leaving a job.