Explain my severance - non-admission clause
Explanation of non admission clause contained in most severance agreements.
What is it?The Non-admission clause is a statement by your former employer that, even though they are paying you a severance, they are not admitting to anything. In addition to non-admission, the company usually also expressly denies having done anything wrong.
What does it mean?A non-admission clause is self-explanatory. The company is not admitting anything (this is what "non-admission" means). Even though the company is paying a severance, and even if the severance is substantial, there is no admission of any wrongdoing. These clauses are very common. In fact, even when there is a lawsuit, settlement agreements typically contain non-admission clauses.
The upshotIt is unclear how much value these clauses add because: (1) severance/settlement agreements typically contain confidentiality clauses which prohibit the employee from disseminating the terms of the agreement, (2) a severance/settlement agreement settles and resolves the dispute between the company and the employee, so even if it is an admission, the employee cannot bring a claim, and (3) even without the non-admission clause, there is usually nothing else contained in a settlement or severance agreement which could constitute an admission. Nevertheless, companies like these clauses because non-admission clauses preclude the possibility that a confidential settlement agreement will be used against the company in the future.