Losing a job is stressful, and employers often ask for fast decisions at exactly that moment. This page covers two questions: whether your termination was unlawful, and whether the severance agreement in front of you is worth signing as written.
Is a firing “wrongful” in Colorado?
Colorado is an at-will state, which means an employer can generally end employment at any time without giving a reason. But “at-will” has limits. A termination can be unlawful when it is:
- Discriminatory. Based on race, sex, age (40 and over), disability, religion, national origin, pregnancy, sexual orientation, gender identity, or another protected category.
- Retaliatory. A response to a complaint about discrimination, an accommodation request, protected leave, a wage complaint, or whistleblowing.
- Against public policy. For example, being fired for refusing to do something illegal or for doing something the law encourages, such as serving on a jury.
- A breach of contract. Violating an employment contract, or in some situations promises made in a handbook or offer letter.
The reason an employer gives is often not the real reason. Shifting explanations, sudden criticism after years of good reviews, and unequal treatment of similar employees are the facts that tend to matter.
Before you sign a severance agreement
A severance agreement usually trades money for a release, meaning you give up your right to sue. Once you sign, you generally cannot take that back. Read for these:
- What claims you are releasing. A broad release can cover discrimination, retaliation and wage claims you may not have considered.
- Time to decide. If you are 40 or older, federal law generally gives you at least 21 days to consider an agreement (45 days in a group layoff) and 7 days to revoke after signing. Do not let an employer rush you.
- What you are getting. Pay, benefits continuation, unused vacation, bonuses and commissions you may already be owed, and a neutral reference.
- Confidentiality and non-disparagement. These terms can limit what you can say about your employer. Under Colorado law, nondisclosure provisions that limit your ability to disclose an alleged discriminatory or unfair employment practice are void unless they meet specific statutory conditions, so these clauses deserve a careful read.
- Restrictive covenants. Non-compete and non-solicitation terms, and whether they are even enforceable.
- Tax and other effects. Severance can affect taxes and sometimes benefits such as unemployment.
Severance terms are often negotiable. Employers frequently improve an offer when an employee has a lawyer who identifies claims or risks the company would rather avoid.
Non-compete and non-solicitation agreements
Colorado law restricts non-compete agreements and sets conditions for those that are allowed, such as pay thresholds and notice requirements. Non-competes are generally limited to highly compensated workers, must be for the protection of trade secrets and no broader than necessary, and require a separate signed notice. Many agreements that employers ask workers to sign are unenforceable in whole or in part, and an employer that presents a void non-compete can owe actual damages and a $5,000 penalty per worker. Review before you sign, and before you accept a new job that depends on whether an old covenant still applies.
What to do right now
- Do not sign yet, and do not feel obligated to respond before the deadline in the agreement. Ask for the date in writing.
- Keep every document: your offer letter, handbook, reviews, pay stubs and the agreement.
- Write down what happened around the termination, including who said what.
- Check your final pay. Colorado has rules about when final wages must be paid.
Deadlines
Discrimination or retaliation claims generally require a charge within 300 days. Other claims have different limits. If you have a severance deadline, treat that as the first clock.
Frequently asked questions
Can I negotiate a severance offer?
Often yes. Employers frequently have room, particularly when the release covers real legal risk.
What if I already signed?
Bring the agreement to a lawyer. Some are not enforceable as written, depending on how they were presented and what they cover.
Do you review agreements without taking the whole case?
Yes, frequently.
Talk to an employment lawyer
Request a consultation or call (720) 316-8061.
This page is general information, not legal advice, and reading it does not create an attorney-client relationship. Past results do not guarantee a similar outcome in any other matter.