Signing a release without legal consultation?

Jul 12, 2012

At the time of termination, employees need to ensure they are treated fairly.  In some cases employers will present them with a release and ask them to sign it on the spot or within minimal days to consider their offer.  Employees need to be responsible for what they do and sign.

In a recent case highlighted by employment lawyer Daniel Lublin in the Globe and Mail, Eric Rubin, who was 63 at the time, had worked at Home Depot Canada Inc. for nearly 20 years when he was suddenly fired in what Home Depot described as a restructuring.  Mr. Rubin was told it was his last day at the company and given a letter confirming his dismissal and encouraging him to sign a release.  He was unaware of what he was actually entitled to, and he therefore signed the documents on the spot, believing that Home Depot’s offer to him was fair.  However, soon after, Mr. Rubin realized that he had made a mistake.

In the court’s view, Home Depot had taken advantage of an older and long-term employee.  Accordingly, the court struck down the release, awarding Mr. Rubin double the amount of severance than he was initially offered, plus his legal costs – an amount more in line with what is considered fair.

In his latest article published in the Globe and MailDaniel Lublin, offers the following advice to any Canadian employee faced with an offer of severance and release:

  • Employers do not assess their severance obligations based on what is considered fair.  They make offers of severance based on what employees are likely to agree to, since most people are unaware that they can negotiate or sue for more.  For this reason, most severance packages are negotiable, so ensure that you are receiving a fair offer before agreeing to its terms.
  • Tell your employer you need more time to meet with a lawyer or financial adviser to ensure you fully understand the terms of the severance package.  Very few companies will refuse to provide a few extra days to consider an offer, aware that denying this request could cause to challenge any agreement.
  • Try to understand the interplay between what the legislation requires and employer to provide in terms of severance and what it is actually providing.  Many severance packages offer employees little more than the statutory minimum, which will almost never be fair.

It is always good to consult with an expert before signing any document since not all stories end successfully, as this one.  The full article written by Daniel Lublin can be read in the Globe and Mail.

 

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