Top Tips for How to Get the Most Severance

Top Tips for How To Get The Most Severance

 

When an Employer offers a terminated employee severance it is not done out of the pure goodness of the Employer’s heart, but rather because the Employer wants something.  We know this because if an Employer would not want something then the Employer would merely hand the now-terminated employee a severance check (or direct deposit money into the now-terminated employee’s bank account), rather than requiring the employee to sign a severance agreement and general release to get such money.

Frequently when an Employer terminates an employee’s employment the Employer will deliver such a severance agreement to the employee, offering to pay severance generally for the following main reasons:

1. in exchange for a release of potential claims that the employee may bring (which is why the agreement is frequently called a “Severance Agreement and General Release”);
2. for confidentiality (asking that you keep private information secret); and
3. non-disparagement (asking that you agree not to air out the Employer’s dirty laundry/ not publicly say anything negative about the Employer).

Additional reasons why an Employer may offer severance/ more severance is in appreciation for the employee’s long employment with the Employer, in appreciation for the accomplishments that the employee had for the Employer (monetary accomplishments are of the most value in this regard), and so that the employee will not compete with the Employer/ won’t solicit the Employer’s customers/ employees.

Many individuals believe  –  wrongly  –  that the terms in the severance agreement (monetary and language) initially offered by the Employer are final, and that they cannot negotiate for more or better severance terms.  Yet to the contrary as shown by the above, the Employer wants something (in particular the Employer wants something that you have), and depending on the circumstances there may very well be a good likelihood that if handled/ negotiated properly the Employer will increase and improve their severance offer.

In this regard I have negotiated hundreds of severance agreements in Chicago over the years  –  and I have frequently (an overwhelming majority of the time) obtained more and better severance for individuals than what they were initially offered.  I have also frequently obtained substantial severance for individuals who were not even offered any severance by their Employer.

As a result of my experience over the years of being an Employee Rights Lawyer as well as a Chicago Severance Lawyer I am aware that there are certain things that you can do/keep in mind to enhance your likelihood of receiving severance/ more severance.  Specifically addressing the situation where an Employer has delivered a proposed severance agreement to the employee, the following practical tips should be kept in mind:

1. You do not need to –  and should not  –  sign the severance agreement right away.
2. You should consider deadlines & act promptly.
3. At the termination meeting listen, ask only pertinent questions, & be professional.
4. Try to objectively assess the situation –  and take into consideration what leverage (positive arguments and negative arguments) you may have that may result in the Employer agreeing to have you receive more and better severance.
5. Write out a bullet-point list of the top 5-10 accomplishments that you had during your employment.
6. Write a chronology of relevant incidents/ statements.
7. Don’t try to negotiate on your own –  hire an attorney.
8. Understand that both monetary and non-monetary terms of the severance agreement have value (to you and/ or the Employer) and may very well be able to be negotiated.
9. Be organized, focused, and realistic –  don’t overestimate your situation and don’t under-value your position.

These tips (and more) are discussed and described in detail upon clicking on the above links.

Because I am well-experienced in negotiating employment severance agreements for individuals here in Chicago, call me to briefly discuss your situation to see if it makes sense for you to come in for an appointment to my Chicago Loop office.

 

1. You do not need to –  and should not  –  sign the severance agreement right away.

Emotions are raw when you are first handed a severance agreement, which is frequently delivered at the time the Employer is advising you that the Employer is terminating your employment.  That is a bad time to make a major life decision (which decision can have big ramifications to you both monetarily as well as with regard to rights that you would be giving up)

Some Employers  –  generally the more unscrupulous ones  –  will try to get you to sign the severance agreement right when they deliver it to you.  This is a red flag that something is amiss.  You do not need to sign it right away.  Almost all severance agreements contain a written provision that the employee has a certain specific period of time to sign and return the severance agreement (usually the employee will have 21 days or 45 days, but I also have seen 1 week to 10 days).  That time is provided  –  sometimes by law  –  for the individual to duly consider and negotiate the terms of the severance agreement.  This is an opportunity for you that should not be wasted.

You do not get bonus points for signing the severance agreement right away, and by signing it you are giving up valuable rights (and financial and other opportunities) that you may not have fully considered.  You may also be in shock when the severance agreement is delivered to you (which frequently is presented in a meeting in which your employment is terminated), and that is never a good time to make a major financial decision.

Keep in mind also that once you sign the severance agreement you may very well be giving up/ “waiving” your right to negotiate for more and better severance, and you may also be contractually bound in other ways (confidentiality, non-disparagement, liable to the Employer for attorney fees for a breach, prevented from competing/ working at certain other employers).  So think long and hard before you sign the initially proposed severance agreement  –  and do not sign it right away.

 

2. You should consider deadlines & act promptly.

On the same day that you receive the proposed severance agreement document you should check it for how much time you have to sign and return the agreement.  As mentioned above, usually an employee will have 21 days or 45 days to sign and return it, but it can also be 1 week, 10 days, or another period of time.

You should also look over the contents of the proposed agreement promptly, and if you decide that you want to have an attorney review it/potentially negotiate more and better severance terms, then preferably within a day or so you should make arrangements to meet with an attorney  –  the more time the attorney has to review and negotiate back & forth with the Employer/ the Employer’s attorney, the better off you will be.  In this same regard, you should not wait to the last day (or later) to act:  waiting to the end will just serve to put your back against the wall (although sometimes in that situation you/ your attorney can get contact the Employer and more time to consider/ negotiate the agreement).

To put yourself in the best position to negotiate better and more severance (generally by and through an attorney that you will hire) you should act promptly and not delay.

 

3. At the termination meeting listen, ask only pertinent questions, & be professional.

The severance agreement is generally delivered to the employee at the termination meeting.  This is a meeting that the Employer has arranged and prepared for, and that the employee may very well not be expecting/ not expecting it at that moment.  Also the Employer may have 2 or more people present on its behalf for this meeting (for support and as witnesses), while the Employee will be all alone.

At this meeting you should mainly be listening, and keep your talking to a minimum.  If there are pertinent questions that you have you may want to ask those questions, but it will probably not serve you well to ask too many questions or be confrontational.  During this meeting the Employer may very well say claimed facts and detail its claimed reason why it made the decision to terminate your employment  –  claimed facts and reasoning that you/ your attorney may later be able to use as admissions as well as show are faulty/ disparately applied.  But if you are not listening closely (and subsequently writing detailed notes about what was said) then whatever the Employer said that may otherwise be useful for you will be lost.

Remember, anything you say at this termination meeting can and probably will be used against you either as a claimed admission or to disparage your character.  The Employer has already made its decision to terminate your employment, and few if any Employers are going to change their decision.  While there may be a certain satisfaction to speaking up and telling off the Employer/ telling the Employer what you really think of him/ her, from a tactical and negotiating standpoint that is not helpful  –  and may very well reduce/ eliminate any opportunity for you to later obtain more severance.  Likewise, yelling, screaming, and threatening is not helpful, and (although in a movie it may make for an entertaining scene) this may undermine your cause:  instead just be professional.

Also keep in mind that at the termination meeting (and thereafter) if you try on your own (without an attorney) to negotiate more severance  –  and the Employer says no  –  then this will likely make it more difficult for your attorney to later successfully negotiate more severance for you.  So think long and hard before you speak.

 

4. Try to objectively assess the situation –  and take into consideration what leverage (positive arguments and negative arguments) you may have that may result in the Employer agreeing to have you receive more and better severance.

Positive arguments are accomplishments that you have achieved during your Employment that the Employer may not have fully considered when the Employer was deciding on what severance to offer you.  Some examples of this are longevity (e.g. a 20-year employment), bringing in much sales/ profits for the Employer, etc.

Negative arguments are potential legal claims (such as discrimination, retaliation, breach of contract) that you may have that the Employer may be liable for.  It is very important for you to be able to accurately assess the strengths and weaknesses of your potential claims and of the Employer’s potential defenses to those claims.

• Knowledge of the facts and the law is critically important.

An attorney experienced in employment law, employment litigation, and negotiating severance agreements (such as myself) will be able to best objectively assess your situation.

Likewise, an attorney well-experienced in handling employment/ severance matters (such as me) will be best able to persuasively present to the Employer such positive and negative arguments/ facts, and potential legal claims, so as to maximize the amount of severance/ increased severance that you may receive (as well as to well take into consideration the non-monetary terms that can make all the difference to your future).

While an attorney would be the best person for you to consult with, at a minimum you should at least speak with trusted friends and family toward getting a proper perspective of the situation and better seeing and understanding your options, and how best to proceed.

 

5. Write out a bullet-point list of the top 5-10 accomplishments that you had during your employment.

Many people (non-attorneys as well as attorneys) do not know/ forget to address an employee’s accomplishments when negotiating for severance/ more severance.

While it is true that despite your accomplishments the Employer terminated your employment, it is very possible (actually it is likely) that the Employer did not fully/ sufficiently take into consideration your accomplishments when deciding what amount of severance to offer you  –  and accordingly, reminding the Employer of your accomplishments toward requesting more severance is an opportunity that you should not ignore.

For example, if you are a salesman, and as a result of your sales the Employer reaped $250,000.00 in profits, then if the Employer only offered you 4-weeks severance (say $4,000.00), you (or better still your attorney) may be able to successfully appeal to the Employer’s sense of right and wrong to obtain more severance for you.

Toward writing out a bullet-point list of your top 5-10 accomplishments, I suggest as follows:

• Organize your list in order of importance, putting your biggest/ important accomplishments at the top of the list.
• If you were employed by the Employer for a long period of time (say 10-25 or more years) that should be listed first.
• Accomplishments that brought in revenue/ profits for the Employer are generally looked at as most important to Employers in these kind of matters.
• Bringing in clients that will result on an ongoing basis in the future in more revenue/ profits for the Employer is also looked at as important/ of value.
• Not having been issued any disciplines is certainly worth noting (denotes that you were not a trouble-maker –  which Employers value).
• Solid attendance shows reliability.

If you were terminated for an error/ claimed misconduct then likely will have a more difficult time getting severance/ more severance, but if under those circumstances the Employer is offering you severance then there may be a (hidden) reason on the part of the Employer for why it is being  –  perhaps the allegations against you are not so strong, or are exaggerated, or you have a potential discrimination claim that the Employer is concerned about  –  and there may be arguments that you/ your attorney can make to have you receive more severance than what the Employer arbitrarily offered.

If you did do the wrongdoing then perhaps you can show it was out-of-character for you  –  and contrary to your usual good character and accomplishments.  This will bolster your argument for more severance (particularly if you can show that the amount of the severance is unjustly low compared to what your accomplishments were for the Company.

 

6. Write a chronology of relevant incidents/ statements.

Many individuals find that it is helpful to write down things  –  it helps people organize their thoughts and helps to remember things (also, from a health standpoint, once you have written it down you may very well no longer feel the need to keep replaying a scenario in your head toward attempting to remember something, which should then help put you more at ease).

I am strong proponent of having my clients write things down  –  both with regard to positive arguments (accomplishments) and negative arguments (potential legal claims, such as discrimination, retaliation, breach of contract, etc.).

With regard to negative arguments, some things that you may want to write out in detail may include:

• A chronology of relevant incidents that happened during your employment, and in the termination of your employment;
• Incidents where similarly situated other employees were treated more favorably than you (where you were treated in a materially adverse manner as compared to similarly situated employees)

The key here is to understand what you are trying to prove/ show:  what is the purpose behind what you are attempting to remember/ show to others?  What is the best way to show this?

 

7. Don’t try to negotiate on your own –  hire an attorney.

There are many reasons why it is important (likely critically important from a $ standpoint) for you not to try to negotiate on your own, but rather for you to hire an attorney for consultation and to negotiate on your behalf.  In particular:

1. The Employer will know that you are serious if you hire an attorney.
2. Leverage –  the Employer will know that by you hiring an attorney that your attorney can easily commence a lawsuit or otherwise pursue a claim (which is something that the Employer may not believe if you do not have an attorney).  This will improve your negotiating position.
3. A knowledgeable attorney should:

• have a better and proper understanding of what amount of additional severance should be requested, and how to request it/ negotiate for it.
• be able to make a better and proper evaluation of the factual situation (and what are your and the Employer’s true strengths and weaknesses, as well as determining what is the viability of any legal claim that you may have).
• have more of an awareness of many arguments that can be used toward obtaining more severance for you.
• have a better understanding the ramifications of the language in the proposed severance agreement.

Hiring an attorney to negotiate for you can mean the difference between $0 severance, the severance that you were offered, and thousands to tens of thousands of dollars in more severance that you could obtain through proper negotiation.

On severance matters some attorneys (including myself) charge reasonable fees that are well affordable  –  sometimes even on a contingency basis  –  which are even affordable by individuals who have just been terminated from their employment.  In particular, if you call me on a severance matter you will find that my fees are very reasonable and in large part are based on me getting more and better severance for you.

 

8. Understand that both monetary and non-monetary terms of the severance agreement have value (to you and/ or the Employer) and may very well be able to be negotiated.

Direct monetary severance (either paid in a lump sum or over time) generally is the most important term in the severance agreement, but there are many other terms and facets to a severance agreement that can be extremely important and should be considered.  For example:

• Check how the severance agreement addresses any outstanding money/benefits that may be owed (e.g. bonuses, commissions you’d already earned or were about to qualify for, vested and not-yet-vested stock options, profit sharing, PTO days, accrued vacation pay, etc.).
• Check whether the Employer is agreeing to pay your health insurance during the period of the severance, or is the Employer just offering salary (and look into when your health insurance/ payments will be discontinued).
• Are outplacement services important to you? If yes then you may want to request it if it is not in the offer.  But if you are not interested in it, and it is in the offer then you might want to try and trade it for more severance or for something else of value to you.
• Make sure the severance agreement does not contain language that restricts your ability to work for other employers or in certain fields of employment or locations (restricted covenants –  non-compete/ non-solicitation clauses).
• Review confidentiality terms closely, and make sure that you understand them and start to abide by them immediately.
• Check to see if there is a non-disparagement clause (that you are not to disparage the Employer, which protects the Employer), and likewise if there is a neutral reference clause (that would be protecting you from the Employer saying negative things to a prospective or future employer –  which oftentimes is of critical importance to individuals).
• Make sure the severance agreement includes language that does not hurt your prospects of receiving unemployment compensation benefits.
• Review the severance agreement for penalty clauses (such as your forfeiture of severance in the case of a breach of any of the terms of the severance agreement –  even for a breach that did not cause the Employer to suffer any monetary or other damages) or liquidated damages (that likewise can be disproportionate to harm).
• Review the severance agreement for one-sided or unfair terms (such as you being responsible for the Employer’s attorney fees and costs in connection with a breach –  which can financially wipe you out).

 

Because you are not familiar with what are standard terms for a severance agreement, and language within the proposed severance agreement may have much legalese and hidden meaning, you should hire an attorney to review (and potentially negotiate) the severance agreement.

As mentioned in the preceding section, knowledgeable attorney (such as myself) will also be able to better assess the likelihood of your obtaining more severance, and will be able to have more leverage than you alone to negotiate more and better severance for you.  In this regard, the Employer will well-know that your attorney knows the law, and will know how to file an EEOC Charge of discrimination or a lawsuit against the Employer without great difficulty, while the Employer may not have the same fear/ concern that you on your own know or are able to do this  –  this is leverage that you alone likely do not have, but that you with an attorney would have.

 

9. Be organized, focused, and realistic –  don’t overestimate your situation and don’t under-value your position.

It is just common sense, but make sure to be organized, focused and realistic.  This is extremely important in severance negotiation (and otherwise).  Toward organizing your thoughts  –  and being focused  –  it may very well be helpful to write out your points before saying them.

If the Employer has delivered a severance agreement to you during your employment  –  or verbally advised you that they want you to consider severance (rather than continuing your employment)  –  but the Employer has not advised that they are terminating your employment, this is a special situation in which different opportunities and dangers are presented.  Again, not to be a broken record, but this is a situation where you very well may want to consult with an attorney to explore your options and best protect your rights.

It is more difficult to get more severance in a lay-off situation (since presumably the Employer is offering severance to a group of employees according to a set formula), but it might be a situation where a good argument can be made that you should not have been selected for lay-off (and that it only occurred due to discrimination/ retaliation, or contrary to the Employer’s seniority/ selection process).

If, by chance, you are okay with the monetary terms of the severance, but have issues with non-monetary terms (for example language issues), let the Employer know this.  Generally the Employer’s biggest concern is that you want more monetary severance, and by stating that you do not want more monetary severance (if that is the case) then that may very well open the Employer up to having a more successful and productive dialog with you.

If you are negotiating on your own  –  again, not advisable (as the Employer who has likely just fired you will not respect you or fear you acting by yourself without an attorney)   –  when negotiating be focused on what is most important to you and what are your main concerns.  Also, do not negotiate when you are in shock or if you feel overwhelmed, and instead try to negotiate from strength not weakness.  Think what are your strongest/ weakest arguments, and what are the Employer’s vulnerabilities.  It may be a good idea to write this out, rehearse what you are planning on saying in front of a family member or a trusted friend (whose feedback you value), and have what you wrote out in front of you when speaking with/ calling the Employer.

 

Lastly, in this regard, note that if you first try on your own (without an attorney) to negotiate with the Employer  –  and you give a counter-proposal to the Employer’s initial severance offer  –  and it doesn’t go well, then from past experience I know that it is that much more difficult for me to get a maximized good result for you.  One reason for this is that you have shown weakness by switching gears, and the other is that I may very well have given a larger initial counter-proposal but I may be constrained to some degree by the lower initial counter-proposal that you gave.