The unexpected loss of a job can cause significant hardship for a terminated professional. Many people do not have enough resources and savings to live comfortably while they are between positions.
In many cases, professionals who suddenly lose their jobs rely on severance pay to maintain their standard of living until they acquire a new position with a different company. Unfortunately, many professionals may find themselves struggling to obtain severance pay after learning about their inclusion in the layoff or a targeted termination.
Many long-employed professionals, especially white-collar professionals, may expect to receive severance pay after a sudden exit from their position. Can companies refuse to provide severance pay after letting a worker go without notice?
Severance pay often isn’t mandatory
Neither federal laws nor Texas state employment statutes make severance pay universally mandatory. Typically, the right to a severance package stems from an employment contract. The longer professionals have retained their positions with companies, the easier it may be for them to misremember details about their original contract with the company.
Those who suddenly lose their jobs may not actually have negotiated a severance agreement with their employers before the termination occurred. Without a written agreement with an employer, workers often only have the option of negotiating for severance during the termination process.
Even when an employment contract may require severance pay, clauses within the agreement may limit the company’s obligation to provide severance in certain circumstances. Generally speaking, severance agreements tend to include clauses that eliminate the right to severance packages after a termination for cause.
If an employer has documented poor job performance or disciplinary issues and terminates the worker because of those problems, the company may have legal justification to refuse to provide severance. Even though the worker negotiated for severance when initially taking their position with the company, they may need to negotiate to assert that right during the termination process.
Workers attempting to negotiate new employment contracts and those concerned about their financial stability after the loss of a job may need support as they review the terms of a contract and negotiate with their employers, and that’s okay. Having support while negotiating a severance agreement or responding to a pending termination can help professionals limit the lasting economic hardship caused by a sudden firing or layoff.
