A comprehensive executive severance policy can help employers avoid
litigation and bad press when an
executive is terminated. Although
75 percent of companies report that they have such policies, only half of those
companies formally define the conditions, events, and terms for payment, according
to a recent survey by Hay Group.
Among the lessons learned from this lawsuit: Employers should amend their severance plans so that they specifically provide the content of releases and nonsolicitation agreements.
Many companies have instituted severance plans. But as the case of Baldo vs. Zippo illustrates, employers need to be cognizant of the legal complications that can arise.
Are employers making the mistake of overreaching to avoid
discrimination claims? That's one of the questions to consider in this New York lawsuit regarding severance payments.
The economic downturn has forced many employers to contemplate or actually resort to reductions in workforce and retiree benefits. If that's where you're heading, too, watch out for these traps.
