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Marsha411JD
Marsha411JD, Lawyer
Category: Employment Law
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Experience:  Licensed Attorney with 28 yrs. exp in Employment Law
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Company is asking me to sign a Mutual Separation Agreement.

Resolved Question:

Company is asking me to sign a Mutual Separation Agreement. In return, they are offering me some monetary compensation. I do not know much about mutual separation agreements. Would you be able to give me the highlights in a couple of sentences? I am worried that by signing this document I will somehow damage my career.
Submitted: 3 years ago.
Category: Employment Law
Expert:  Marsha411JD replied 3 years ago.
Hello,

In order to assist you I will need to know what State you work in and also, what in particular you are concerned about in signing this document, since the issues related to these cannot be highlighted in a couple of sentences?
Customer: replied 3 years ago.

Hi Marsha,

 

I am in Illinois. Here are my major concerns as related to sigining a mutual separation agreement.

 

- Would future employeers know about this? If the answer yes, that would jeopardize my ability to find another job.

- Can I file for unemployment?

- Do I lose my vested 401k amounts & pension rights?

Thanks for your help

Expert:  Marsha411JD replied 3 years ago.
Hello again,

Thank you for your questions. Future employers will only know what you and your former employer tell them. So, if the mutual separation agreement says that you are voluntarily resigning, then that is what your former employer will likely tell prospective employers. The agreement itself is probably confidential and probably says so somewhere. A future employer wouldn't care about that agreement anyway, all they would care about would be why you left employment. If you are facing termination or cause, then you want to make sure that the agreement says your employer will give you a positive reference or at least will not disclose any negative employment history. That is the only way to be sure that your employment history is not shared, since under the law an past employer has the right to provide any truthful information about a former employee that they have.

Although you can file a claim for unemployment, you are not likely to be eligible because this agreement will be seen as a voluntary quit without "good cause." Facing termination or just deciding to accept a separation agreement is not "good cause." You would have to carry the burden of proof to show that the employer was somehow at fault for your leaving. In other words, that they did something unlawful or made a drastic change in the terms and conditions of your employment that forced you to leave. Not likely in an agreement situation like this.

As for your vested rights under ERISA, unless you have specifically waived them by name in the separation agreement, no they won't be effected by the agreement.


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Marsha411JD, Lawyer
Category: Employment Law
Satisfied Customers: 17534
Experience: Licensed Attorney with 28 yrs. exp in Employment Law
Marsha411JD and 3 other Employment Law Specialists are ready to help you
Customer: replied 3 years ago.

Thank you. A quick follow up question:

 

Are we 100% sure that mutual separation agreements do not support me filling for unemployement? If we are sure, is there any legal language I could require to be put into the agreement that would allow me to file for unemployment? I have leverage and can ask them to do that. Sorry, this has been very stressful for me. Thank you

 

Expert:  Marsha411JD replied 3 years ago.
No, as I mentioned, you could file and try to prove that you quit for good cause. I can tell you that if your agreement says that it is a mutual agreement or that you are voluntarily resigning, then that is considered by the State as a voluntary quit, and without good cause, you would not be eligible for benefits. That I am sure of. If the agreement says the employer is terminating you without cause, then you would be eligible for unemployment benefits. Do not take their statement that they will not dispute your unemployment eligibility as anything of value. It is the State and not the employer that makes the ultimate decision based on the facts surrounding the termination.

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Licensed Attorney with 28 yrs. exp in Employment Law