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How to Negotiate a Severance

Posted by attorney John Mccarthy

I’m often asked how to negotiate a severance package. Mass layoffs are no longer dominating the news, but struggling companies are still looking to cut costs, often one or a few employees at a time. Workers who are part of mass layoffs will find it more difficult to negotiate some sort of severance deal. But, workers who are laid off one at a time can find considerable negotiability.

What to Do When You Are Facing a Layoff

Whenever you are faced with a lay-off you should:

  1. Immediately consult with an employment lawyer to discuss your rights;

  2. Do what you can to preserve your rights;

  3. Seriously consider any severance package; and

  4. Negotiate a better deal before you sign anything.

Companies routinely require laid off employees to sign documents that waive almost all of their rights to sue. Moreover, companies frequently try to get you to sign off on “non-compete" and/or “trade secret" agreements. While non-competes are not favored in California, trade secret agreements are far reaching and can really damage an employee’s job prospects and maybe even put the employee on the opposite end of litigation. Most companies give employees 21 days to review severance agreements because of the Older Workers Benefit Protection Act and the ADEA. So there is no excuse not to review the severance package with a professional.

How to Negotiate the Severance

You should try to get as much as you can. Most employers feel terrible about letting long term employees go. One of the ways you can capitalize on that is by playing to their guilt. You can sometimes double your severance and negotiate additional perks like keeping that company laptop or iPad and even getting the employer to pay for your job coaching.

Most companies offer one to two weeks’ pay per year worked. But, there is no magic formula and everything is open to negotiation. If you or someone in your family has health problems, you should let the employer know and try to negotiate extended health benefits. You might even find it beneficial to offer to fill in if needed.

Employers don’t want to get sued. You may have wrongful termination, harassment, discrimination, or age discrimination claims. But, frankly, you need to talk to a wrongful termination lawyer or a discrimination attorney. You probably should not sue unless you have a serious claim and you are willing to accept that future employers are leery of workers they perceive as litigious. Instead focus on how to brand yourself in your future job search. Working with your employer to maintain strong references can help you get over the shock of losing your job a lot more easily.

_ San Diego Wrongful Termination / Discrimination Attorney_, John F. McCarthy, has dedicated his life to representing and counseling employees throughout California.

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