You're Fired! Now Focus on Getting a Better Severance Package
If you’ve been laid off, here are some quick tips you should follow to obtain a favorable severance package and be ready for your next job.
I'm Fired?Getting fired by your employer is shocking, especially when you don't see it coming. When it happens, employers often offer a severance package in exchange for signing a release. A release does just that: It releases the employers from a potential wrongful termination claim or lawsuit. However, the employee has some rights, too. It doesn't matter if you're Rosie O'Donnell getting the boot from The View or a tech employee let go from a startup. Here are three tips to negotiate a better severance package.
Employment Tip #1: Remember, you generally don't have a right to severance.California law does not require employers to provide severance pay upon termination. Generally, severance pay is only required if your employer offers it. Check your employee handbook, other written materials, and speak with employees and Human Resources to find out what the employer's severance policy is, if any. If severance pay is offered in writing, been promised, or provide to other employees you may be entitled to it upon termination and you do not need to sign a release. Even if you are not entitled to severance pay, you can still try to negotiate for it.
Employment Tip #2: How to get severance pay or negotiate a better severance package.When you're fired and given a release to sign, you must read it thoroughly, since it contains everything your employer wants. Take note of any deadlines for signing it. You can ask for an extension if you need more time. In essence the employer is offering you money in exchange for a release from any lawsuits, a promise not to disparage them, and other boilerplate provisions. If you feel you have been wrongfully terminated based on a discriminatory motive, such as gender, age (over 40), race, disability, or other categories protected by law, you should speak with an employment attorney before signing the release. If your attorney feels you have a strong wrongful termination case you have leverage to negotiate a better severance package. Take time to figure out what path you want to pursue. Remember a wrongful termination case can take several years to settle. Tell your employer that you have spoken with an attorney and been advised that you have a potential wrongful termination case. The employer will generally be inclined to offer you higher severance to avoid a lawsuit.
Employment Tip #3: How to negotiate a better severance package.You can try to negotiate anything you want in a severance package, but if you don't make reasonable requests the negotiation will fail. Think about your employer, what they may or may not agree to, and the circumstances of your termination. I tell my clients: 1. Ask for more severance pay within reason. If they offer one month, ask for three months and be prepared to settle for two. 2. Request a Letter of Recommendation, and draft it yourself to have it say what you want. 3. Ask to be laid off so that you can collect unemployment. 4. Negotiate more months of paid health insurance coverage (COBRA) or anything else within reason, according to your employment situation. These are some of the ways to make a bad situation better and help you recover more money so you can pay your bills while looking for your next job. Every severance situation is different. So you should consult with an employment attorney to understand your full range of legal options. Remember the adage from Alexander Graham Bell who said, "When one door closes, another one opens."