“My severance agreement says I can never re-apply; can I get around that?”

Question: In January, 1998 I signed a severance agreement with a former employer that precludes me from applying for employment with that company or its affiliates. It says “ Employee also agrees in the future not to reapply for employment with the  Company or any of its affiliates.”

I was not dismissed for cause or misconduct, nor had I filed a discrimination complaint. At the time, my boss (a co-worker) decided to outsource my responsibilities.

I would now – 16 years later – like to apply for a job opening with one of the affiliates. Is the “not to reapply” term legal? Might the 16 years made the agreement “stale?” How do I best proceed to have it revoked/rescinded?

Thank you for your help!

Milwaukee, Wisconsin 

Answer: Dear Dennis: I fully understand your predicament, your concern, and your question, because over the years many people have asked me the same question. For the reasons explained below, it is most likely that you have nothing to worry about it, and should just apply for the job. Permit me to explain: 

1. “The “No Re-Apply” clause in your severance agreement is a very common clause in severance agreements, but also commonly misunderstood. In my experience over many years of negotiating severance agreements, I have found such “No Re-Apply” clauses like yours in perhaps 50% of severance agreements. It serves a purpose for employers, and that is why it is in severance agreements, but its meaning and purpose are not understood by many people. In fact, I do not believe that most Human Resources representatives understand it, either.    

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2. The “No Re-Apply” clause is not personal, but definitely makes many laid off employees feel rejected and defensive, and leaves them wondering. Just as you seem to have wondered for 16 years, “What did I do wrong to deserve such seemingly permanent rejection?” many employees feel quite alienated by seeing this clause in their severance agreements. It is interesting to me that, after all these 16 years, you remember it, apparently word-for-word. I assure you – and everyone who reads this blog post – that 99.99% of the time it has nothing to do with you personally. You did nothing wrong or deserving of such rejection-sounding words.

3. The “No Re-Apply” clause is nothing more than an attempt by employers and their lawyers to avoid future lawsuits by employees who were paid severance. The phenomenon of employers giving severance to their terminated employees became widespread in the early 1980’s when (a) computers began to replace employees, (b) jobs began being shipped overseas, and (c) many of our anti-discrimination laws were passed. To reduce the many employee lawsuits that were then arising from the many laid off employees, employers started to offer severance packages to employees, BUT ONLY IF the employees signed releases of claims and waivers of lawsuits. In fact, “give-a-release-get-a-severance-package” is the essence of severance: it is to eliminate employee lawsuits. 

But you must understand one important detail: a release of claims works only to release claims that existed at the time of its signing, in the past, but does NOT apply to claims that arise after its signing. Said differently, a release of claims works “retroactively” not “prospectively.” 

Sure enough, a few employees (1) signed releases of claims, and (2) then received severance packages, and then (3) went on to apply for new jobs with the same employer, and then (4) when not hired, claimed discrimination in hiring, and (5) sued anyway. Ouch!! The whole idea of giving severance in the first instance was to avoid lawsuits. That gave birth to the “No Apply – No Hire” clause.    

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4. However, if Employer and Employee agree on one thing, Employer and Employee can agree to change their minds, too. Imagine, for the moment, that Norman and Nancy are married, and get divorced. Imagine, also, that they sign an agreement that says, “Norman promises never to ask Nancy to marry him again, and Nancy agrees never to marry Norman again.” Now, what happens if over the years they miss each other, don’t find new marriage partners, and both change their minds? Can Norman and Nancy remarry? Of course they can, no matter what they agreed years earlier. 

It is the same exact thing between employees and employers: if they later find each other particularly “attractive,” they are free to change their minds, and return to their former relationship, just as Norman and Nancy did. For this reason, if you and your former employer’s affiliate now want to enter into a new employment relation, you and they are entirely free to do so, regardless of what they agreed to 16 years earlier. 

5. Moreover, I sincerely doubt that anyone but you (a) still has a copy of your severance agreement in their files anymore, or (b) remembers the “No Re-Apply” clause, after 16 years. In my experience, rarely if ever does any employer maintain records for more than a few years. Even if someone at your former employer’s affiliate has a copy of your severance agreement, I strongly doubt that they will read it over carefully, and I even more strongly doubt they will care what it says. 

Is it possible that someone will say, “Sorry, Dennis, you agreed not to apply again”? Yes, but highly unlikely. Is it possible someone will say, “Dennis, you violated the agreement; now pay back your severance”? If there is a chance, I put it at one out of one hundred thousand. In my estimation, there is almost zero chance of anyone knowing, caring or acting against you for applying for a job, now, 16 years later. 

While nothing in life is guaranteed, my view is that you have everything to gain, and quite-near-zero to lose by re-applying. Hey – if they say, “Dennis, you violated your severance agreement,” just send them a copy of this blog post. I think that would educate them, and they will then simply decide if you are the applicant with the skills, experience and demeanor they seek.  

6. Incidentally, the 16-year passage of time does not make the agreement “stale” or otherwise unenforceable. As to your question about the passage of time, I know of no legal “time limit” argument that the 16 years makes the provision you agreed to somehow either “stale” or unenforceable. There are three reasons for this: (i) first, there is no time limit agreed to, that is, it says in the future,” and does not incorporate a specified time limit, such as “six years.” (ii) Second, our legal “time limits,” called “statutes of limitation,” begin to run from the time that a contract breach or violation of law take place, that is when a “legal claim” arises. Here, no one has breached anything, or broken any law. (iii) Finally, no Court can force someone to hire you against their will, making any legal action simply unavailing. 

By the way, we now offer by PDF (paper printed from your printer) or DIGITAL DOWNLOAD to your tablet my classic, “Fired, Downsized, or Laid Off,” what many consider the unofficial “bible” of how to negotiate severance. If you would like to obtain a digital copy for your tablet, just [click here.]

Dennis, I hope this explains that you did nothing to “deserve” the “No Re-Apply” clause 16 years ago, and that it should not pose a burden or barrier to you now. Gosh, 16 years is a long time to wonder. Good luck in your job quest!

My Best,
Al Sklover 

P.S.: One of our most popular “Ideal Packages” of forms, letters and checklists is entitled “Ultimate Severance Package” consisting of four Model Letters/Memos for severance negotiation, as well as our 94-Point Severance Negotiation Checklist.” To obtain a complete set, just [click here.]           

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