Electronic Signature Legality for Terms of Use Agreement in United Kingdom

How to eSign a document: electronic signature legality for Terms of Use Agreement in United Kingdom

each year hundreds of thousands of people across america are fired or let go from their job and presented with a severance package when an employee accepts one of these severance deals they're given money in exchange for their signature at the bottom of that contract but what the heck is in these this video is going to explain what is in the typical severance contract because these are not free money you give up significant legal rights but because contracts are pretty boring i'm going to keep this video interesting by comparing this 10 000 severance agreement versus this 400 plus thousand dollar severance agreement [Music] [Applause] [Music] before we get into it we need to get three simple things out of the way number one you're about to see actual severance agreements of former clients of mine all identifying information has obviously been redacted but these are as real as it gets number two i've made several other videos on severance one is about how to determine if your severance offer is fair or not and the other was about how to negotiate for more severance if you didn't get offered something fair i highly recommend that you watch those other videos after you finish this one i'll give you the links at the end of this video number three i have a license to practice law only in california but i've made this video to help anyone in america because most of the terms in a severance deal are very similar from state to state however youtube videos are not legal advice if you need legal advice call an employment lawyer in your state so he or she can read your actual agreement and hear your termination story this video is meant to give you a basic understanding of what is in these agreements so you can ask your lawyer educated questions now if you did work in california and you were presented with a severance deal and you think there was something seriously wrong with your termination or suspect with your termination don't be afraid to call my office for a free consultation if you think i've earned your phone call all right let's get this party started okay for this video we're largely going to be looking at the computer screen at certain contracts and that sounds really boring but we're going to compare this ten thousand dollar severance agreement with this four hundred thousand plus dollar severance agreement so you can see the differences between the two um you'll find that they're not that different um but i really want you to understand the basics what are they saying what do these terms actually mean so that you can make an informed decision whether or not you want to sign it or if you need to hire an attorney to do a better review so here we're going to be looking we're going to be going back between this is the ten thousand dollar one simple redacted and then we're going to look at the complex redacted this is the 400 000 plus dollar one number one party definitions they usually define who are the parties to the agreement so if we look here it says this agreement is made by and among the name of the employee the employee and the name of the company the company this is really where it lays out who is who and how they're going to be referred to in the contract simple enough right does this exact same thing in the fourth out four hundred thousand dollar one right here number two recitals the next part of the contract is kind of introductory remarks and we call these recitals you'll see in the simple uh ten thousand dollar one the recitals are very short in the complex one the 400k one they're much longer but they largely are just introducing what the contract is what it's for and what the parties are trying to do with it so i think the better example here is in the 400 000 one we'll skip some of the unimportant ones but here's really what you should read whereas the parties intend that executives employment with the company will terminate on and they give a specific date here for this bigger contract the 400k one this person was an executive and they were telling him or her that they were firing this person uh in the future and was like seven months in the future and then the person was going to have was going to work during that seven months six or seven months and then they were going to get paid a lump sum at the end of that time period to as recompense for signing this agreement and we'll get into the specifics of that in a minute the simple the ten thousand dollar severance agreement it just simply says this agreement sets forth the resignation of the employee that this is an amicable settlement and the payment of severance whereas in order to accomplish the foregoing the parties are willing to enter into this agreement so it's kind of telling the purpose of it and frankly this these recitals and this simple agreement were really poorly written um but my client didn't want to try to negotiate the unimportant part of the agreement so they simply signed it so yeah that's the recitals not very exciting number three severance payment and the time frame of the payment the next part of the agreement is the meat and potatoes well i guess you should say it's the meat and the next provision is the potatoes this is where they're going to tell you what they're paying you and the time frame in which they are going to pay you that amount so if we look at the 10 000 severance deal it literally says in consideration of employees promises that means in exchange for the employees signing this agreement the company hereby agrees to pay employee the total sum of ten thousand dollars that's the severance payment okay that's how much they're going to pay you the next part of it is where they talk about kind of the taxation what is the uh how is this going to be taxed most in most severance deals they say something to the effect of and withholdings will be held as normal so let's say they're paying you ten thousand dollars and you actually made ten thousand dollars a month working for the company well the company when they pay you normally they withhold money for social security disability unemployment that kind of stuff they will usually say that they're going to do that with the severance payment now this one was a little bit different they were going to pay this person on uh on a 1099. so he says right here 1099 basis and so in order to do that they required the person to sign a irs form w-9 that's not all that unusual it happens all the time but this part also usually identifies and tells the employee hey you got to pay taxes on this and if the irs comes after us the company you're gonna have to indemnify us if you didn't pay your taxes or if somehow we're getting audited for this that's not unusual at all and usually i don't have my clients try to negotiate that part simply because everybody knows they got to pay taxes and the company's just simply saying if you don't pay your taxes and we get audited for it you're gonna have to pay us back for that and that's totally fair then usually this agreement says when the person is going to get paid the time frame in which they're going to get paid so in this one um it says the company will pay the employee within two business days of both parties executing this agreement that's really fast compared to most in the complex severance agreement the four hundred thousand dollar one they kind of outline uh that the person's gonna have to work for six or seven more months and then they're getting fired so they have this transition period and they say during this transition period you're going to receive your current salary during this transition period and that essentially meant that since this person was making i think 250 grand a year they're going to receive their base salary as normal during that transition six or seven month period then they're going to get fired and they're going to get paid severance and in this case this person will receive one year's salary or 250 thousand dollars uh less applicable withholdings as we talked about earlier to be paid within 15 days of the effective date of this agreement what that means is this person is going to get a lump sum once they get officially fired of 250 grand minus tax withholdings cool that's nice lump sum they got fired that sucks but now they're going to get an entire year's salary worth because this person negotiated out a significant severance deal and that's not where it ended for the executive this person is also going to get if the board of directors declares one the annual bonus so if they declare an annual bonus for the company that executive would get it and likely in this person's case i think it was going to be like 50 to 100 grand maybe even six figures so this person was going to get six or seven months base salary they were going to get a 250 grand lump sum once they were officially fired then if the board of directors declared a bonus they would also get a bonus which would potentially be six figures and then it goes on to say cobra premiums this person might actually get 12 months of their health insurance premiums paid by the company so normally when somebody gets fired and they're on the company's health insurance plan the company needs to provide them with a cobra notification which says they can elect to continue using company health insurance benefits but they simply need to pay the premium this is very common very normal and a lot of people when they're negotiating their severance deal they negotiate that the company is going to pay their cobra premiums their health insurance premiums for a certain amount of time now again this is a highly compensated executive this is somebody who had a lot of leverage over the company now what this doesn't tell you is why is one person getting paid 10 grand and the other person getting paid 400 000 that is far beyond the scope of this video in fact i made another video talking about is your severance agreement fair or not or how to evaluate the fairness of a severance agreement or not and i highly recommend you watch that video once you finish this one if you haven't already number four the release uh like i said these the severance provision was the meat of the agreement the next provision the release is the potato all right this is what you're giving up for the money this is the whole point of why the company is offering you severance they are offering you money in exchange for a release so let's scroll down here let's look the release essentially what all this says is that you are giving up your right to sue the company and in the 400 000 severance agreement it says it generally says they're giving up your right executive releases and forever discharges company from any and all claims complaints charges duties obligations demands and causes of action of any kind of any nature and character known and unknown which employee may now have or has ever had against any of the you know releasees like the company entities the employees subsidiaries parent companies which arose prior to or on the date of the execution of this agreement so you're signing an agreement giving up your right to sue the company for anything that happened in the past from the date you know you signed the agreement on january 1st anything that happened before that is covered by this agreement anything in the future is not now in both of these agreements there's this general release and then they get into some specifics uh for example the age discrimination and employment act americans with disabilities act in the 400 000 severance agreement it specifically outlines you're giving up your right to discrimination harassment retaliation wrongful termination claims and then they outline specific statutes the california labor code labor uh private attorney paga claims the fair employment and housing act these are california specific statutes because this was a california company and a california employee most severance deals have this big release provision and it's really just trying to hammer home what you're giving up by signing the agreement number five no admission of liability it usually says something to the effect of the parties agree that nothing contained in this agreement and no action taken by either party with regard to this agreement shall be construed as an admission of liability or that either party did anything wrong so by signing this agreement you're acknowledging the company is not admitting to doing anything wrong and you're not admitting that you did anything wrong both parties are signing this to gain peace and move on okay number six the age discrimination and employment act now if you're over the age of 40 and the company has fired you and they're offering you a severance deal there's usually because by law they have to have it in here a provision called the age discrimination and employment act or adea what this law says is that if a company provides an employee a severance deal they have to give them 21 days in which to consider the severance offer and if the employee signs it they have to give the employee seven days in which they can change their mind and revoke their signature on the severance deal they have to tell you that you should consult with an attorney before you sign the deal or that you had an opportunity to consult with an attorney before you sign the severance deal long story short this is a mandatory law so it's not and there's nothing unusual about it uh and it's in almost every severance deal where the person is over the age of 40. number seven confidentiality now and you all knew this was coming the next really big provision is confidentiality obviously right by signing this agreement you're gonna have a muzzle on your mouth as to what you can talk about after you sign it and this is in every severance deal so here in the simple ten thousand dollar one there's a confidential information the employee shall not use nor disclose to anybody any of the company or its affiliates or predecessors or financial information that the employee learned while working with the company confidential information shall include confidential proprietary trade secrets scientific technical business you're giving up your right to talk about proprietary things that you learned while working at the company also and this is really important um if we go down to the confidentiality provision um on the 400 000 one there's gonna be part of this that says you can't tell people about how much money the company is paying you in the severance deal so let's say they're paying you 50 grand and you sign it and you get that money you can't go tell all your buddies who still work at the company hey they paid me 50 000 that would definitely breach almost every single severance agreement i've ever read they don't want people knowing how much they paid you and frankly it's not anybody's business and you shouldn't want people knowing either they also have provisions regarding trade secrets proprietary information and this is really important that you carefully evaluate this and carefully read it most companies have things that they want to keep quiet because they derive economic value from keeping those things quiet whether it be the design or a formula for a product or how they manufacture something or a customer list whatever they don't want you going out and using that with a competitor or or telling people about it so make sure you understand what you're signing before you sign it number eight a non-compete and or non-solicitation clause after confidentiality there's usually a paragraph or two about non-competition or non-solicitation what do these mean well in many states employers and employees are allowed to contract and actually sign an agreement that if the employee is fired or they leave their job at that company they can't go work for a competitor now with some exceptions provision non-competition provisions like that are unenforceable in the state of california so if you're in california largely they can't do that even though i see companies try to do it all the time in many states non-competition agreements are legal so you're gonna have to check with your state's laws or consult with an attorney in your state to find out if those provisions are valid in your state beyond that we also have non-solicitation provisions that says if you go work for a different company or a different industry or even a competitor you can't go back to your buddies who worked at the you know employer and solicit them to leave and come work for your new company there's usually a provision a time limitation on that says you can't do it for a year or two um depends on your agreement your state's law but largely those are enforceable number nine non-cooperation after these non-competition non-solicitation provisions we usually have something called non-cooperation what this is asking you to do is if a buddy of yours or somebody at the company who's still there is thinking about suing the company and they're trying to find out information about the company or they're trying to get you to help them with a lawsuit this provision is prohibiting you from cooperating with them in their quest to sue the company and get money from them or if there's some sort of government inquiry going on into that company's affairs you can't cooperate with them now there's limitations to this and you're going to want to read your provision specifically and consult with an attorney in your state as to what's allowed in your state but generally it's saying hey if somebody is currently still working there or used to work there and is trying to sue them you can't cooperate with them you need to avoid them there's usually also a provision in there that talks about what if you get subpoenaed like somebody else is suing the company and their lawyer sends you a subpoena for a deposition or for documents you usually in these provisions need to inform the employer that you've been subpoenaed to give them a chance to contest that subpoena or to limit it or something to that effect before you know they get you into a deposition and you get to talk talk and talk about whatever you want so it's very important that you read this provision carefully if somebody's reaching out to you and asking you for help or if you get a subpoena number 10 a non-disparagement clause the next provision usually is and you all knew this was coming a non-disparagement provision which usually says something to the effect of you can't go into the media or you can't go on social media or you can't go out and write any a mass email and blast the company after you've signed a severance agreement you can't make up lies you can't embellish things you should keep your mouth shut after you sign a severance deal that's what the provision says number 11 return of company property this next part is very self-explanatory it revolves around company property essentially it usually says two things number one if you haven't already you need to return company property this includes things like laptops phones company car whatever proprietary information you need to affirm that you don't have it anymore and that you've sent it back or you need to affirm that you already have returned all company property so this is pretty self-explanatory you just need to say that you've returned it all or that you're going to return it within a certain period of time whatever your particular provision says number 12 activities that are not prohibited now after that we usually have a provision called protected activity that is not prohibited we have a big paragraph here in the 400 000 severance deal that says things that this agreement does not prohibit you from doing and the best example of this is workers compensation let's say you sustain an injury while working for the company and they lay you off you sign a severance deal and then your injury becomes substantially worse after you sign the severance deal well depending on your state's laws and depending on what's written in this agreement usually this provision says that you can still file a claim like that or if you had a claim before you signed the severance deal you can still pursue a claim like that now there's a lot of other things that they can't prohibit you from doing and they specifically have to tell you what those are in the severance deal not all employers follow that rule by the way but many do all this provision says it details the things that you're allowed to do even after you sign the severance deal 13. lawyer mumbo jumbo what do i mean by that well there's usually a lot of provisions i think this 400 000 one has really good examples of what's typical there's a lot of quick provisions like severability uh entire agreement no oral modification governing law uh counterparts voluntary execution what do all these mean a lot of people they scratch their head when they're reading all this legalese well i'll go through the the common ones really quickly number one severability all this is saying is that if a judge is looking at an agreement and he or she or the court finds that one particular provision violates the law this provision is instructing that judge to simply excise out that one small provision and enforce the rest of the agreement that the judge the court shouldn't throw out the entire agreement because one small provision was violative of law okay the next common one is the entire agreement this one really confuses a lot of people but really all it's trying to say is that if you sign this you're agreeing that what is written on the four corners of the agreement what is written on the paper is what your agreement is that if the company has promised you something orally or there's another document floating around promising you something no what's written on this agreement is all that matters and this supersedes all of the prior agreements whether or in writing so what's written on the agreement is what what matters things outside that don't matter the next common one is which is in almost every single severance deal is the governing law this is simply telling the judge which states law to apply to the agreement and where somebody would have to file a lawsuit if there's going to be a lawsuit over this agreement or the terms of the agreement as you can imagine there's a lot of people who work in california or they work in new mexico yet the employer is based in washington or in you know maine or nebraska or something like that long story short this is simply telling the court which law to interpret now there's a lot of confusing conflicting laws about what courts should do when presented with provisions like that way beyond the scope of this video i won't get into it but largely this is simply telling the court which law to apply and where it's supposed to be litigated next release effective date this is trying to identify what date this agreement takes effect sometimes people sign an agreement but it doesn't become effective tell seven days after that sometimes the parties agree that the agreement doesn't become effective until you know six months down the road once they finish out the transition period which was the case in this agreement things like that next are counterparts this is very common but essentially all it's saying is that the company can sign this agreement and you could print out the same exact agreement but it doesn't have the signature of the company representative on it and you could sign it and so long as you had both signed copies that would be treated as one agreement so the parties can sign the same agreement in counterparts and would be effective not everybody's signature has to be on the exact same piece of paper next this is very common this is a voluntary execution all this is saying is that you voluntarily agree to uh sign this agreement not that complicated not that exciting and 14 the signatures after that it's pretty simple we usually have a signature page where you put your scribble and date that you scribbled it and the company puts their scribble and the date that they scribbled it same thing on the ten thousand dollar severance agreement the parties would sign right here please read carefully this agreement includes a release of known and unknown claims and then you sign it and that's it severance agreements are scary they're complicated to for people who aren't lawyers a lot of people read it and they go i don't understand what this is saying but by and large what these agreements are saying is you're giving up your right to sue the company in exchange for money and these are all the stipulations and provisions surrounding that now if you read through your severance deal and there's a lot of things in there that are highly alarming to you well i strongly recommend that you call a lawyer in your state to get a consultation and pay them some money to explain those terms to you also uh if you are being fired under very suspicious circumstances you think the law was violated in the way you were fired then you should definitely call a lawyer in your state if you are in the state of california and you worked in the state of california you're more than welcome to contact my office for a consultation and review the consultations are always free but we do charge for severance review when it gets elevated to that level but that you know sometimes a lot of people consult with us and they don't need a severance review and we tell them that finally if you found this video to be helpful uh please consider giving it a thumbs up on the youtube you know buttons down below that really helps and tells you youtube that this video was helpful to you if you know somebody who got fired recently and they were presented with the severance deal send this video to them so that they can just at least start to formulate educated questions uh to ask a lawyer in their state or a lawyer that they hire i hope this video has been helpful to you and i hope you have a fantastic day take care [Music] you