Severance Agreements

Severance Pay Lawyer – Charleston, SC

Severance agreements are often used between employees and employers when an employee is being laid off during a reduction in force by the employer. Employers can benefit from severance agreements by limiting their liability and by limiting potential future lawsuits from employees. Employees can benefit from severance agreements by receiving a lump sum payment to help tie them over until they are able to find subsequent employment.

Severance pay is not mandated by law and an employer is not required to provide any form of severance pay to a separating employee. In the event that an employment contract provides for severance pay, however, the terms of the employment contract will control and the employer will be contractually bound to the terms therein relating to severance pay. Often, employment contracts will stipulate that an employee terminated for cause is not entitled to severance pay even though the employee would have received severance in the absence of cause for termination. Courts have routinely upheld an employer’s refusal to pay severance in such cases.

Employment Contracts

While South Carolina is an “at-will” employment state, the presumption of employment “at-will” does not apply where an employment contract exists between the employer and the employee.

Where an employee and the employer have a contract setting forth the terms and duration of the employment between the parties, the contract controls the terms of the employment relationship. Where the employee has an employment contract with the employer, the employee is not employed “at-will” as would otherwise be the case and both the employer and the employee must abide by the terms of the contract.

Additionally, an employment contract may be created by an employment handbook. Handbooks are often issued by employers to employees upon hire. Handbooks typically set forth the rules and guidelines that an employee must follow. Handbooks often set forth progressive discipline systems by which employees in violation of the employer’s guidelines will be punished. Handbooks that contain affirmative, promissory, or mandatory language often create contracts of employment and both the employer and the employee must abide by the terms of the handbook.

An employer may, however, prevent a handbook from creating an implied contract by including a conspicuous disclaimer in the handbook that specifically adheres to the statutory rules set forth by the South Carolina Legislature. Even where an employer has properly disclaimed a handbook from creating a contract, an employer may nevertheless unintentionally create an employment contract by providing oral statements of assurance of a job or promises to an employee.