How To Negotiate Severance

Forbes Susan Adams
April 12, 2013

A friend called recently and asked if I’d written anything about negotiating the best possible deal with your employer when you lose your job. A friend of hers feared she was about to be laid off and didn’t know if there was anything she could do to protect herself.

Getting prepared is a good idea, say career coaches and lawyers who advise workers on how to handle a termination. The emotional shock of a layoff can be devastating, so it’s helpful to try to make a game plan in advance.

Mass layoffs are no longer dominating the news, though struggling companies are still axing large numbers of workers, like United Technologies’ recent announcement that it would cut 3,000 employees. Meantime, say coaches, other employers are trimming their rosters, though the firings tend to come one or a few at a time.

Coaches say that workers who lose their jobs as part of group layoffs have a tougher time negotiating a better severance package. But it’s worth trying, especially if you’ve logged a number of years at your company and formed strong relationships.

The two most important pieces of advice offered by employment professionals:   Take some time to digest your company’s severance offer, and do negotiate for a better deal before you sign anything. Employment lawyer Wendi Lazar, a partner at Outten & Golden, notes that companies routinely ask departing workers to sign a document that waives almost all rights to sue under any federal discrimination statutes and state or local laws. At the same time, your employer might present you with an onerous non-compete agreement. Lazar says it’s wise not to sign before you consult with a professional, be it a lawyer or a coach, especially when it comes to non-competes. Those agreements deserve a separate article, but suffice it to say that the law requires employers to offer quite a bit of severance if they expect workers not to compete for an extended period.

Under the federal age discrimination law, Lazar adds, workers who are over 40 have the right to take 21 days to review a severance agreement. Lazar says this 21-day period has become routine in most companies for workers of all ages.

                                *                   *                   *