PRACTICE AREA
Severance Negotiations & Agreements
In some layoff situations, employers offer severance packages in exchange for employees waiving their right to sue. Severance agreements are almost always drafted by a company attorney with the sole objective of protecting the company’s rights.
During severance negotiations and agreements it is highly recommended that you consult with an employment lawyer before accepting a severance package.
How we Negotiate Employment Severance Agreements
Unfortunately, hard work and loyalty no longer guarantee long-term employment. Good employees increasingly endure layoffs and reductions in force regardless of their workplace accomplishments.
Though employers have the right to reduce their workforces, there are laws that limit the criteria they may consider in deciding whom to lay off. For example, we can negotiative employment severance agreements if employers consider prohibited workplace discrimination during the layoff:
Employers may also be prohibited from considering other criteria that have a “disparate impact” on certain protected classes.
Critical Questions about Severance Offers
At Van Kampen Law we help our clients answer these questions. We will negotiate directly with the company to enhance your severance package and insert contractual provisions that protect your ability to secure future employment.
- Do you have any potential legal claims you could pursue against the company rather than accepting the severance offer?
- Is the amount of the offer commensurate with the merits of your potential legal claims?
- Is the amount of the offer consistent with the industry standard in light of other considerations such as your position and tenure?
- Does the severance agreement protect you from the company giving negative references to prospective employers?
WORKING TO “ENHANCE” YOUR SEVERANCE PAY
Our goal when negotiating severance agreements is straightforward: to maximize the amount of severance pay for the client. Depending on the circumstances, you may have the bargaining power to drive up the amount of severance and benefits initially offered by the company–you simply might not be aware of it.
We can help you leverage your position to create a more favorable severance agreement.
Approaches to Severance Pay Negotiation
Different firms use different approaches in severance pay negotiations. Our approach in severance negotiations is not to slam the table or to threaten your former employer.
We believe our firm has already established a reputation for aggressiveness that does not require theatrics or bellicose rhetoric. We are sensitive to the fact that it is often not in our client’s best interest to alienate or antagonize their former employer. The company cannot be forced to sign a check for additional severance; it must be persuaded.
To that end, we try to collaborate with defense counsel in a professional, yet frank discussion using alternative dispute resolution. We discuss the offered severance package and why it is deficient or undervalued in comparison to the merits of our client’s claims and potential recovery if we prevail at trial. Oftentimes, we know the defense lawyers representing the employer, which also helps facilitate productive discussions.
Review Your Offer with a NC Employment Attorney
Despite our best efforts, severance negotiations sometimes fail, and clients may find themselves at a crossroads of taking the current offer or pursuing their legal claims. We help our clients review their offer with a NC employment attorney.
We discuss the advantages and disadvantages of litigating their claims so they can make informed decisions. In some situations, the right choice is to walk away from the offered severance package.
Employers are generally willing to pay more in settlement discussions after a lawsuit has been filed, as they face the possibility that the recovery at trial may greatly exceed the initial package that was offered.