Explain my severance - no reemployment clause
Explanation of no-reemployment clause typically in severance agreements.
What is it?The No-reemployment clause prevents a departing employee from coming back to the company. This is part of the consideration that goes to the company. In exchange for severance (money, benefits, reference, etc.), the company gets, among other things, a promise from the employee to go away. And stay away. The no-reemployment clause is the second promise - to stay away.
What does it mean?The no-reemployment clause is self-explanatory. It says don't come back.
What's the point?The no-reemployment clause closes a "situation" for an employer. It effectively closes the chapter on an employee. There are many reasons that companies like these, but there are two primary reasons. The first is the obvious, the employee is being paid to go away and stay away. This justification is especially useful for problematic employees or when there is a contentious relationship. The second reason is that is helps a company avoid liability for a later claim (by the same employee) for discriminatory or retaliatory failure to rehire.
The upshotIt is the rare employee who is terminated and then wants to come back. It is even more rare in the case of a no-reemployment clause. The good news is that most companies retain the option of re-hiring an employee. And this does happen from time to time. If an employee has a good relationship with his or her former employer, nurtures that relationship, and an opportunity comes up, that company may still re-hire the employee even in the face of a no-reemployment clause. For the most part, this clause simply gives the company an easy way to say no.