In today’s fast-paced world about 40% of people are fired from a job in their lifetime. If you were fired today, would you know how to negotiate for a lucrative severance package?
At Gardner Employment Law, we have successfully negotiated numerous severance packages for diverse personnel because we understand the strategies and tactics that can encourage employers to offer warranted severance packages. Give us a call today if you want expert guidance on how to negotiate for more severance because we can get you what you deserve.
How Do You Negotiate On the Way Out?
When you’re “on the outside looking in,” you might wonder how you’d ever be able to negotiate for a greater amount of severance. You must think in terms of leverage: what do you have of value that the employer wants or, the flip side, what can you prevent from happening that will benefit the employer.
The truth about severance pay is that the employer is “buying peace.” Almost every severance agreement contains a release of all claims that the employer wants signed. The employer will pay you to sign it. Remember that you are signing a legally binding contract. As we explained in “Severance Agreements: Read Before You Sign,” it’s important to fully understand the document before signing and making it legally binding.
If you sign the release offered by your employer, you contractually agree that you will never file any claim or lawsuit against the employer for any event, known or unknown, that has happened up to the date of your signature. That release is part of your leverage, since it is something important that the employer wants and is willing to pay good money, i.e., “severance pay,” to get the signed release.
To obtain more in severance pay than is offered, you must think of an additional value that you can offer or a detriment to the employer that you can prevent. Sometimes it can be as simple as your signature on that release. The employer wants the signed release so badly that it will pay more than was first offered in order to get it.
What Do Severance Packages Typically Look Like?
Experts on severance agreements have agreed that there is not a common template executives follow when crafting severance packages, but most consist of the same of the same key elements of pay and benefits. Before we detail the specifics on the negotiation process, let’s dive deeper into what severance packages typically look like.
- Financial compensation: Financial compensation from a severance agreement can be offered in various ways. This includes a lump sum payment based on the employee’s length of service, stock options, salary continuation for a specified period, and payment for unused vacation or sick days.
- Continued access to insurance coverage and other benefits: Severance packages can include continued access to benefits by providing the departing employee with extended coverage for a specified period. Additionally, other benefits such as retirement plans, life insurance, health insurance, and disability coverage can also be extended which provides support and security during the employee transition period.
- Job-search assistance: It is common for severance packages to provide the services of an outplacement agency which provides the terminated employee with access to resources such as resume writing guides, interview preparation courses, career counseling, and job search guidance. They also typically provide access to professional networking resources.
A variety of these three components are what will most likely be included in a severance agreement contract, which is why experts from ABC news have stated that there are many different angles employers can take. The significant disparity among severance agreements highlights the significance of carefully reviewing the terms of the contract with an expert attorney.
Be Careful Not to Threaten “Extortion”
An employee may have a valid legal claim and threaten to file suit if a certain amount is not paid. The line between hard bargaining and extortion may not be crystal clear. The mere threat to file a lawsuit, even a meritless lawsuit with obvious economic ramifications, generally is not deemed to be extortion. However, if false information, unwarranted publicity, grossly exaggerated economic demands with a flimsy connection to the claim, or threatening to file a criminal complaint are used as negotiating tools, these methods probably are illegitimate. Using these methods could cross the line between zealous advocacy and extortion.
What Negotiation Tactics Should You Use for More Severance Pay?
The severance package negotiation process can be very nerve-wracking but with the right tips and guidance, you will be able to navigate it with ease. Here are a few preliminary tactics to use to negotiate the terms of your deal.
- Keep calm and collected: The termination process is not easy to endure. You are not guaranteed to find another job quickly, and the effects it could have on you and your family are detrimental. You may feel scared or overwhelmed during this process, but it is vital to stay calm and control yourself. This will allow you to analyze your situation without bias and ensure that the outcome is positive.
- Do not sign anything right away: During termination, an employer may immediately ask you to sign a deal the company offers. It is crucial not to sign your employer’s offer right away because you are not required to sign the agreement right when it is presented. There is potential for revisions to the agreement, and there is probably an argument that could be made for a more profitable severance package.
- Go back to your offer letter and contract: If you are terminated, it is important for you to go back and re-read your initial offer letter and employment contract. If you can’t find a copy of it, talk to the human resources department and they should be able to get you a copy. There may be valuable terms of separation in the agreement which could be useful when negotiating for your severance agreement. Your employer may not be fulfilling their duty in their first severance package offer, and you want to have this information ready to present to them.
- Set a realistic goal: Having a clear and specific goal in mind is crucial when negotiating your severance deal. Consider factors such as your tenure and the quality of your work, and align them with the specific terms you desire to include in your severance contract. By approaching the negotiations with well-defined objectives, you increase the likelihood of successfully attaining those objectives.
- Ask a professional for help: Inclusion of hard to understand legal jargon in the terms of your severance package may be a tactic used by your employers to get you to sign an inadequate severance agreement. You may have been wrongfully terminated or a victim of discrimination harassment, and an employment expert could help you get compensated for your employer’s wrongdoing. Getting in contact with a severance negotiation attorney will help you combat these strategies by your employer and help you get the best deal possible.
Contact a Severance Negotiation Attorney
You may have more leverage in negotiating your severance package than you think. The facts behind the reason for your termination may support a valid legal claim that you do not want to release for a paltry amount. Before signing away your rights, you should talk with an expert employment lawyer who can assess the value of your claim.
At Gardner Employment Law, we’re here to help you in negotiating your severance contract. If you need help, give us a call.