When should you negotiate your own Severance Package? You do not need a lawyer to negotiate your severance package. Disclaimer: we always advise to consult with an attorney when considering signing important legal documents like a severance agreement. The most common reasons you might not get an attorney include:. You do not want to spend money to consult with an attorney, under any circumstances; You are content with the amount of money the company is providing; You are content with the other benefits provided COBRA ; You are not concerned with either the confidentiality or non-disparagement provisions of your agreement; You do not have any questions about the terms in your severance agreement; You just want to move on.
Your employer needs to have a good reason to negotiate with you about the pay and terms of your severance package. While you may be able to negotiate a nominal increase, your ability to negotiate significant increases in pay or changes to terms on your own is likely reduced significantly because of the following reasons:.
Reason 1: Generally, when it comes to providing severance packages, companies do not do it as a gesture of good will. It is a business transaction. Simply appealing to their humanity to provide a better severance will do very little by way of increasing your severance. Reason 2: Any threat that you might file a lawsuit in order to increase your severance pay is likely to be dismissed because of the perception that an employee with a strong claim would be represented by an attorney.
Reason 3: The individuals you will be negotiating with in human resources often do not have decision making authority to increase your severance in significant ways.
Identify a compelling reason to negotiate your severance package. First you must identify a compelling reason the company should provide you with a better severance. The most compelling reasons are ones that could affect its bottom line, such as:. Valid threat of a legal claim for discrimination, unpaid wages, harassment, etc. Making the request. Before you go back to the company, you need to determine:. What specifically you are asking for; Why you are asking for it; How to respond if the company pushes back and says no; Whether you are willing to walk away from your severance package if the company refuses any or all of your requests.
Beware of the risks of negotiating your own severance package. You should be aware of the risks, however, of negotiating your own severance. One risk is that you will fail to understand the true value of any potential case you have against the company. If you undervalue your legal claims you risk leaving money on the table by failing to ask for enough. On the other hand, if you overvalue your claims and ask for too much, you risk the company refusing to negotiate.
The other risk you face when negotiating you own severance packages is the possibility of making missteps or misstatements.
Consider the real-life example of an employee who decided to negotiate her own severance:. Real Life Example:. The company offered Jennifer a severance package with a confidentiality agreement. Unsatisfied, Jennifer attempted to negotiate a better package. During the negotiation, she disclosed information that weakened her bargaining position.
She was forced to settle for a severance package that was significantly less than what she could have received. Section 9: When should you hire an attorney to negotiate your Severance Package? When should you hire an attorney to negotiate your Severance Package? If you are serious about maximizing your opportunity for a better severance package, you should consider hiring an experienced severance attorney to review your severance agreement, evaluate your employment history and help you negotiate your severance package.
An attorney with experience negotiating severance packages will know what information is important to highlight and emphasize. They will also know the best way to position you during a negotiation. An attorney with experience negotiating these types of agreements should be able to:. Answer questions about your agreement agreement Seek to understand your goals financial, professional, etc. If you are not an attorney, you likely have no way to properly evaluate and value any potential legal claims you have against the Company.
Often times, this is the source of the greatest leverage in negotiating a severance. Client Success Story:. During the course of our conversation, it became clear that Andrea was mischaracterized as an exempt employee and had not been paid overtime.
Knowing that she had strong legal claims to go back to the company with, Andrea was able to negotiate a better severance package. What to look for in an attorney.
If you decide to hire an attorney to help you review or negotiate your severance package, you should find an attorney that can do more than just read the contract and explain what is in it. Most attorneys are capable of doing that. No one wants to spend money on an attorney unnecessarily.
So your attorney should be able to add real value, whether that means giving you the peace of mind to know that you have been provided a good severance package or being able to help you negotiate a better package.
Do you practice employment law? What is your level of experience dealing with [unpaid wages, discrimination, retaliation, etc. What does your fee include and exclude? Things to consider in selecting your attorney. If you have not provided enough information to the attorney, you should be wary of any attorney that commits to do this. The fact is that sometimes hiring an attorney to negotiate with your company directly is actually counter-productive.
It can slow down the process, add little value and just cost you money. The purpose of these questions is to help you evaluate whether the attorney will be a good fit for you. Your relationship with an attorney is no different than your relationship with any other any other person.
Sometimes an attorney and a potential client are not a good fit. After speaking with the attorney, consider the following questions:. Was the attorney responsive? Did the attorney answer your questions? Did the attorney inspire confidence in you that he or she knew the subject matter? Is the attorney someone you feel you can trust? Whatever your decision, the next step is to make a plan and act. If you would like to discuss your severance package with one of our experienced attorneys, we would love the opportunity to work with you.
Our firm practices only employment law, focusing exclusively on representing employees in complex and high-stakes disputes involving unpaid wages, retaliation, discrimination, harassment and other wrongful conduct. Our attorneys are aggressive, trial-tested advocates. We offer a flat-fee severance review package with a hour turnaround from submission to consultation with you.
Free Case Review. This field is for validation purposes and should be left unchanged. Here is language that has been approved by some employers:. A key issue the employee will want to address will be how the company will respond to any reference checks or recommendation requests from new prospective employers. However, in many instances, employers will only confirm that the employee worked at the company and was in good standing.
Other Articles From AllBusiness. The company may include a provision in the severance agreement prohibiting the terminated employee from soliciting other employees to leave the employment of the company. This would normally be subject to a limited time period six months to a year and should not apply to general solicitations of employment not specifically directed to employees with whom the employee did not work. The company may include a broad prohibition on the employee soliciting any customers of the company.
Sometimes, employers attempt to extract a non-compete covenant from the employee, preventing the employee from working with a competitor for a designated period of time. This is obviously problematic for the employee, and must be narrowly drafted or there should be adequate compensation for the non-compete. Some states, such as California, prohibit outright such non-competes unless the non-compete is negotiated in connection with the sale of a business or involves confidential information.
Even in states where a non-compete is legal, they are typically limited in duration to six months to one year and in geographic scope. If agreed upon, the employee will typically ask that the competitors be listed and limited to a few direct competitors.
The offer letter or employment agreement that the employee signed will usually specify the manner of dispute resolution. Here is an example of a pro-employee form of arbitration provision:. The parties agree to waive any rights to a jury trial or a bench trial in connection with the resolution of any dispute under this Agreement although both may seek interim emergency relief from a court to prevent irreparable harm pending the conclusion of any arbitration.
Any dispute or claim concerning the scope or enforceability of the arbitrations provisions of this Section shall be determined exclusively by an arbitrator pursuant to the procedures set forth above. The arbitrator shall have the power to award all relief available in law or equity requested by the parties and supported by credible, relevant, and admissible evidence.
As part of the exit package, the employee may consider asking the company to let the employee keep personal property owned by the company but used by the employee, such as laptop or cellphone. If the employee is going to keep a laptop, desktop, iPad, or cellphone, make sure the company wipes clean any company proprietary data. Employers generally want the terms of a severance package to be kept confidential, especially where the employee receives special consideration.
The severance agreement will also likely acknowledge that any Confidentiality and Invention Assignment Agreement previously signed by the employee will continue in full force and effect.
Sometimes it is desirable for both the company and the terminated employee to enter into a transitional consulting relationship after termination of the employment.
The key terms of such transitional agreements include:. The employee should attempt to limit the scope of the cooperation clause in the following manner:. Richard D. Ask how much time you have to decide whether or not to accept the severance package. A lawyer can advise you on whether to sign and can also help you negotiate a better package.
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