Written by attorney Jacob Iraj Kiani | Jul 6, 2013

Five Tips for Negotiating The Best Severance Possible

Think Like "the Donald" When Negotiating Your Severance Pay

So you found out you're getting canned, the old axe, the trusty pink slip, laid off, or as Donald Trump would say "You're Fired!!" The worst possible thing you could do at this point is to dwell on a decision that has already been made and over which you had (hopefully) no control. Instead, you should be thinking about how to negotiate the best possible severance pay you can to hold you over until you can find another gig. Besides that, in many cases, your (ex-) employer's first offer is not their best offer, especially if there is some particular reason for why your former employer would REALLY like to get your John Hancock on a "release of all claims" or "general release," or similar contract clause. These provisions are typically incorporated into any Severance Agreement you will most likely be asked to sign as a precondition of collecting the Severance Pay. But you're not just going to give away that John Hancock for some bottom-basement price, are you?

Just as your former employer's decision to let you go is strictly a business decision, you need to make a business decision now too by negotiating the highest possible amount in severance under the circumstances. So stop feeling sorry for yourself and transform yourself into a hard-nosed, severance pay-negotiating business machine because although it may not seem like it now, after you've just been let go, your employer wants you to sign that Severance Agreement. However, keep these five tips in mind so that you sign it on your terms, not theirs:

  1. Don't Let Them Rush You: Invariably, your former employer is going to create a great sense of urgency around you signing and returning a lengthy, verbose Severance Agreement, full of legal mumbo jumbo that you don't understand, and that you should understand before you sign.

  2. Don't Adhere to Employer's Artificial Deadline: Employers will routinely put an artificial deadline on the last day you may return the signed Severance Agreement, that is, IF you still wish to be eligible to receive their "generous," but very first, severance pay offer. You know better than that!! You're a merciless, hard-nosed, severance pay negotiating, business machine, and you've done your homework.

  3. Noone Likes a Sure Thing: You at least want to let your boss sweat for a minute, don't you? No one likes a sure thing, so give yourself at least a reasonable amount of time to look over what you're going to be signing. You owe this to yourself.

  4. Always Remember that They Want You to Sign: Remember they would rather you sign the Agreement and that you not ask for any more money. That's why they offered you the severance and well, no one really likes paying more money than they have to for the same exact thing.

  5. Don't Succumb to Their False Sense of Urgency (aka the "Think Like the Donald" Tip): The employer's strategy here usually is that if they create a false sense of urgency and make it seem that at any moment they will yank that first offer off the table, leaving you with no severance pay, you will feel the need to quickly accept their first offer before it disappears. Don't fall for these tricks. At this moment, you should be thinking to yourself (and no, I am not kidding): what would Donald Trump do (or, WWDTD). Yes, WWDTD.

Donald Trump is a skillful negotiator, and he, like most good negotiators, always keeps the other side's motivations in mind while negotiating. And so should you. Do you think Donald Trump just accepted all of the very first offers from all of the contractors he hired to build the great Taj Mahal on the famed Boardwalk in Atlantic City, New Jersey?!? I think not my friend. I think not. Anyone who has watched the Apprentice even once knows Donald Trump better than that. The point is this: your employer offered you the Severance Agreement and an amount of money in severance pay for a reason. They aren't going to suddenly pull the plug on something they JUST offered you. Technically, yes, they can revoke the offer before acceptance, but it's not very likely. Otherwise, they wouldn't have offered you the deal they did to begin with.

BONUS TIP: How to Negotiate Some Extra Time to Consider Their Severance Offer

There will typically be a meeting in which your employer provides you with their first severance number (as an aside, there's a lot more to it than just a number though - don't forget to negotiate Company-paid Cobra Insurance, Extended Health Benefits and potentially Outplacement Services). At this meeting, your employer typically provides you with a copy of the Severance Agreement, and immediately begins creating a false sense of urgency saying that the offer will expire if you don't return the signed agreement by the deadline written in the Agreement (this can always be changed even though the employer has already written it in, giving you the intended impression that the date is already set in stone).

Remember that you are channeling the Donald in this blog post. What would Donald do here? You should politely ask your employer for an extension on the amount of time they are providing you to review and decide on whether you wish to accept their first Severance offer. See . . . Classy . . . Just like Donald. You're totally getting it now.

If they look at you like "how dare he/she ask for more time," stick with what works: Donald Trump. It's an attitude really. Donald Trump has lawyers. In fact, Donald Trump has lawyers crawling all over his world wide Empire. And so do you (or at least, you will), and in any event, it is almost always the case that the Severance Agreement that they just presented to you will caution you (usually located somewhere in the legal mumbo jumbo toward the end of the Agreement) that you should have a lawyer of your own choosing review the Agreement before you sign it.

So if they give you an issue, just very calmly tell them that you would like extra time to be able to have your attorney review the Agreement. They'll love that . . . you bringing up your lawyers that you don't have yet, but that you're going to get as soon as possible. The point is they won't like you bringing up a lawyer, but it certainly sets a decidedly Donald-endorsed, strong, confident negotiator tone right at the beginning of the negotiations. Oh yeah, Mr. Employer . . . you guys are tough business people that have lawyers, and I have lawyers too because I'm just like Donald Trump. Okay okay, now you've taken it too far!

Again, just when you start to feel like you want to retreat back into your cubicle (just one last time for old times sake!), curl into a little ball under your desk, and weep like a baby while rocking back and forth simultaneously sucking your thumb - ask yourself . . . what would Donald Trump think of this behavior. Do you think Donald Trump let his supermodel daughter Ivanna Trump act like this. I don't think so. Toughen up before the Donald unleashes his fury on you. Plus, we still need to get to the last very important severance negotiation Bonus Tip #2, so let's not let the Donald see you like this in this state. Almost as importantly, don't ever let your Employer see any signs of weakness EVER. Not during a negotiation! Now keep reading before the Donald hurts you (totally kidding!)


This last tip is where the Donald really comes in because you should NEVER, EVER, UNDER ANY CIRCUMSTANCES, agree to any offer or suggestion from the Employer that you resign or quit, instead of be laid off or fired, based on the employer's implication (whether said or unsaid) that it will look better for you if you resign rather than be laid off or fired. DON'T BELIEVE THIS. YOU SHOULD NEVER AGREE TO THIS TYPE OF ARRANGEMENT WITHOUT SEEKING THE ADVICE OF AN ATTORNEY FIRST WHO WILL TYPICALLY BE ABLE TO NEGOTIATE AN EVEN HIGHER SEVERANCE PAY NUMBER FOR A RESIGNATION INSTEAD OF A LAY OFF OR TERMINATION. If you quit (euphemistically referred to as "resigning"), you have really hurt any potential case you may have had against your employer as you have now cut off your damages. You have also most likely foreclosed your ability to collect unemployment in the even that next gig does not come as soon as you would like.

Donald is now foremost on your mind because Tip #2 is his absolute favorite. Why? Well, if employees were to resign or quit, rather than be laid off or . . . fired. Well, that would pretty much be the Donald's worst nightmare because then there would be no one left for the Donald to actually fire himself. And the Donald gets cranky when he can't tell people . . . "You're Fired!!" Don't make the Donald cranky . . . Just don't.

Contact Los Angeles Employment and Labor Law Attorney Jacob I. Kiani at the Law Office of Jacob I. Kiani for more information on the best strategies for negotiating a better severance package.

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