Which statement about termination clause limitations is accurate?

Which statement about termination clause limitations is accurate?

• A. It can only limit entitlements to ESA minimums
• B. It can only limit entitlements to the Common Law entitlement
• C. It can limit entitlements to any amount the employer desires
• D. It can limit entitlements to ESA minimums or to greater amounts agreed by both parties

Answer: (D)

Termination clauses must respect statutory minimums while also allowing for more generous terms if both parties agree. The statutory minimums set a floor for severance or notice, so you can’t contract to pay less than those minimums. At the same time, the clause can specify that entitlements are at least the statutory minimum and can be increased by mutual agreement. This matches the idea that you can limit entitlements to the ESA minimums or to greater amounts agreed by both sides, rather than tying them only to Common Law or to any arbitrary amount.

Termination clauses must respect statutory minimums while also allowing for more generous terms if both parties agree. The statutory minimums set a floor for severance or notice, so you can’t contract to pay less than those minimums. At the same time, the clause can specify that entitlements are at least the statutory minimum and can be increased by mutual agreement. This matches the idea that you can limit entitlements to the ESA minimums or to greater amounts agreed by both sides, rather than tying them only to Common Law or to any arbitrary amount.