Rogers, AR asked in Contracts and Employment Law for Arkansas

Q: Hello, I was laid off about 5 months ago and my employment contract included 12 months of severance in exchange for a

release and agreeing to non-compete and non-solicitation terms, which are all straightforward. The company is struggling and is telling me they can't afford to honor the contracted severance payments any longer, which are supposed to continue for 7 more months. I'm not aware of them entering into any bankruptcy proceedings yet. They have told me that they will stop my severance payments this month because they can't afford them, and are asking me to sign an additional release saying they don't have to pay me severance any more in exchange for letting go of my non-compete responsibilities. I would much rather have the money. I am looking for guidance on how to approach this, and how likely it is that I can push back on their notice and continue to receive severance payments, per our contracted agreements.

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1 Lawyer Answer

A: You should contact an Arkansas employment attorney to have your separation agreement reviewed. If your employer promised to pay you a certain amount of money in your separation agreement that they are now refusing to or unable to pay, you may have a claim against your employer for breach of contract.

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