Unraveling the Knots of Severance Agreements

In the wake of the roaring economic juggernaut, the severance agreement, a long-standing corporate mainstay, has quietly evolved from a simple ‘golden handshake’ to a complex, multifaceted instrument. Typically offered to employees upon their departure, these agreements have traditionally served to provide (a) financial cushioning in the form of severance pay and (b) corporate security from real and frivolous litigation.

Severance agreements have increasingly filtered down the corporate hierarchy, reaching even rank-and-file employees. The modern severance agreement is as likely to be offered to the mid-level manager as it is to the C-suite executive, often including a mix of financial compensation, continuation of benefits, and occasionally, outplacement services.

Simultaneously, we’ve seen a broadening in the scope of these agreements. They frequently include non-compete (extensions) and non-disparagement clauses, tying former employees to a web of legal obligations even after their tenure has ended. As many employees are discovering, these clauses can limit their future career opportunities, a reality that seems at odds with the initial generosity of a severance package.

In response, several states have taken action. California, North Dakota, and Oklahoma, for example, have imposed strict limitations on the enforcement of non-compete agreements, citing the detrimental impact on employees’ ability to find new employment. Still, the practice remains widespread in the rest of the Country or simply name it something else.

For example, in response to the reasonableness rule regularly being applied in the favor of employees, the growing trend in employment contracts and severance agreements is to name the restrictive covenant: non-solicitation. Trial courts having dealt with non-competition clauses for so long, are blindsided at preliminary injunctive hearings and have regularly ruled in favor of employers. This trend is unlikely to last. Simply put: if a non-solicitation agreement were different from a non-competition agreement, the non-solicitation agreement would be prohibited as a violation of antitrust law. The reality is, non-solicitation agreements are simply another form of restrictive covenant, and under Michigan law they are legal, provided they are also reasonable.

Severance agreements increasingly include language requiring departing employees to waive any potential legal claims against their employer, effectively silencing potential whistleblowers or litigants. This phenomenon took center stage in the pandemic era, where several high-profile cases revealed that severance agreements had been used to mask inappropriate behavior and workplace discrimination.

As we look to the future, the severance agreement stands at an intriguing crossroads. On one hand, they offer vital financial support for employees facing an uncertain future. On the other hand, they can suppress employees’ rights and limit their career mobility. It’s a delicate balance that the courts, lawmakers, and, most importantly, employers themselves will need to negotiate.

Indeed, the landscape of severance agreements reflects the ongoing evolution of the American workplace. They are, in essence, a mirror of the societal values we choose to uphold, and of the protections we believe employees should enjoy. As we witness the next chapter of the American work culture unfold, it’s a safe bet that the humble severance agreement will continue to play a pivotal role. How we choose to shape it, however, is a question that remains unanswered.

The Federal Employment Law: Basic Employment Protections Provided to Workers

Federal employment law in the United States, embodied in various pieces of legislation and overseen by different government agencies, establishes and enforces the basic protections available to workers. It aims to ensure fair labor standards, workplace safety, equal employment opportunities, and rights to collective bargaining, among others.

Fair Labor Standards Act (FLSA). First enacted in 1938, the Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and child labor standards for full-time and part-time workers in the private sector and in federal, state, and local governments. The FLSA generally requires employers to pay at least the federal minimum wage and overtime pay of one-and-one-half times the regular rate of pay for all hours worked over 40 in a workweek.

Occupational Safety and Health Act (OSHA). The Occupational Safety and Health Act of 1970 aims to assure safe and healthful working conditions for men and women. OSHA requires employers to maintain workplaces free from recognized hazards that could cause death or serious physical harm, and they must comply with standards, rules, and regulations issued under the OSH Act.

Title VII of the Civil Rights Act of 1964. Title VII prohibits employment discrimination based on race, color, religion, sex, and national origin. This law applies to employers with 15 or more employees, including federal, state, and local governments. Title VII also created the Equal Employment Opportunity Commission (EEOC) to enforce these antidiscrimination provisions.

Americans with Disabilities Act (ADA). The Americans with Disabilities Act of 1990 prohibits employment discrimination against qualified individuals with disabilities. It applies to private employers, as well as state and local governments, employment agencies, and labor organizations with 15 or more employees. It also mandates reasonable accommodations for employees with disabilities, unless such accommodations would pose an undue hardship on the employer.

Family and Medical Leave Act (FMLA). The Family and Medical Leave Act of 1993 grants eligible employees up to 12 weeks of unpaid, job-protected leave per year for specified family and medical reasons. This law applies to all public agencies, including local, state, and federal employers, and private sector employers who have 50 or more employees.

Age Discrimination in Employment Act (ADEA). The ADEA, passed in 1967, forbids employment discrimination against individuals who are 40 years of age or older. This law applies to employers with 20 or more employees, including federal, state, and local governments, private employers, and employment agencies.

National Labor Relations Act (NLRA). The NLRA, also known as the Wagner Act of 1935, safeguards employees’ rights to organize and to bargain collectively with their employers or to refrain from all such activity. It also established the National Labor Relations Board (NLRB) to oversee these protections.

While these federal laws provide a basic framework of protections, it is important to note that states also have their own employment laws that may provide greater protections than federal law. Michigan for example has the Elliott-Larsen Civil Rights Act. Workers should familiarize themselves with these laws to fully understand their rights. Employers, on the other hand, should strive to exceed these standards, promoting an environment of fairness, respect, and dignity for all employees. Violations of these laws can result in significant penalties, as well as reputational damage for businesses. As such, understanding and adhering to these laws is not just a legal obligation, but a sound business practice.

Note:  Zamzow Fabian PLLC does practice in some employment law and criminal law which may implicate some civil rights issues, however Zamzow Fabian is not a general civil rights law firm.

比類のない品質にもかかわらず、日本車の輸出額は現在世界第 2 位です

According to reporting from the BBC, Japan has slipped to second place amongst world automakers.



2022 年以降、政治情勢もこの変化に寄与します。多くの自動車メーカーが、市場シェアを拡大​​するために、現在中国が独占している市場から撤退している。





Unsolicited Offers to Buy Your House

So you received a text message offering to buy your house, and you’re wondering if it is a scam. Answering it is an unnecessary risk. There are two likely outcomes:

1. Potential Scam: The first involves scammers. If the text message is a scam, responding to it would only confirm to the scammer that your number is active, and you are someone who may engage with unsolicited messages. This could open you up to more scam attempts in the future. Scammers often use this type of engagement to extract personal information or money from their victims, sometimes through clickable links.

2. Little Reward: The second possibility is that the message is from a legitimate buyer. But even so, such a buyer who approaches you in this manner is unlikely to offer anywhere near the best price for your property. In real estate, the best offers usually come from competitive situations where interested buyers are aware of each other, such as open listings or auctions. The best case from, a direct, unsolicited offer is to secure the buyer a lower purchase price by avoiding competition.

You might also have read a recent article from ProPublica, about companies offering to buy houses, and the subsequent attempt to bury the reporting.

Alchemy of Antitrust: Democracy and the Law

The world of American antitrust law is viewed as a peculiar blend of esoteric legal principles and a litany of economic theories. On the surface, it seems to revolve around innocuous issues like mergers, price fixing, and monopolies. Yet, it is unappreciated as a cornerstone of our democratic capitalist society developed from the darkest periods of American history. It is a realm that carries profound implications for the individual consumer, competition, and the overall economic landscape.

Antitrust law is, at its heart, a fascinating paradox. It is a regulatory mechanism employed by the government to ensure the very existence of a ‘free’ market. While the irony might be lost on some, there is a certain poetry to this. A laissez-faire economy, left entirely to its own devices, risks devolving into a Gilded-Age where the most powerful entities can devour their smaller competitors, thereby leading to market domination and the death of competition. Consequently, antitrust law exists to protect the very essence of capitalism.

The Sherman Act of 1890, the Clayton Act of 1914, and the Federal Trade Commission Act (FTCA) of 1914 are the three primary pieces of federal legislation that form the backbone of American antitrust law. The Sherman Act, in particular, is expansive in its language, prohibiting “every contract, combination, or conspiracy in restraint of trade,” and any monopolistic practices. This has been interpreted by the courts over the years to mean “unreasonable” restraints on trade, a distinction that has fueled endless litigation.

The Clayton Act and the FTCA further refined and expanded the scope of antitrust legislation, focusing on specific practices such as price discrimination, tying contracts, and interlocking directorates. These acts provide for a more robust enforcement mechanisms, including the establishment of the Federal Trade Commission.

Antitrust laws have been tested time and again in high-profile cases, from the breakup of Standard Oil in 1911 to the well-known Microsoft case in the 1990s. The so-called “consumer welfare standard” prevail(s)/(ed) until the present day. Coined by Richard Nixon’s solicitor general Robert Bork, in his 1978 book The Antitrust Paradox, convinced a generation that the only legitimate purpose of antitrust law is to lower prices for consumer. This theory led to a number of mergers and the creation of sector-by-sector oligopolies, and the prospect of another Gilded Age.

As Americans face rising corporate profits and rising prices, the number of critics of Bork’s theory has begun to grow. Those economists and legal scholars who disfavor Bork’s theory, are moving to center stage with the appointment of FTC chair, Lina Khan in 2021. This could mean the FTC might return to pre-Bork antitrust precedent that shepherded the economic boom of the post-War American middle-class.

Recently, as major tech companies like Google, Amazon, and Meta find themselves in the crosshairs of antitrust regulators and legislators, discourse pivots around a fundamental question: Is Bork’s theory, largely predicated on the notions of price, appropriate for today? Critics argue that these tech giants, through their sheer size and control over data, can stifle competition, manipulate consumer behavior, and influence markets in ways that traditional antitrust principles are ill-equipped to handle.

This argument has merit, considering the unique characteristics of the digital economy. Market dominance in this sphere isn’t necessarily achieved through predatory pricing or explicit collusion, but through network effects, data accumulation, and the ability to control essential digital infrastructures. These aspects are not easily captured by existing antitrust frameworks, necessitating a reevaluation of the principles and enforcement mechanisms that underpin antitrust law.

Proponents of Bork’s theory, believe any reevaluation must be undertaken with care to guard against reactionary measures that may undermine the market dynamics that have allowed these tech behemoths to provide unparalleled value to consumers. However, antitrust law is not an instrument for punishing success but rather a tool for preserving the competitive landscape that fosters it. The middle class has had its unparalleled success shrink since Bork’s 1978 theory took hold.

In the end, the great antitrust conundrum isn’t just about laws, it’s about us. It’s about who we are as a society, what we value, and the kind of future we want to shape.