I just got fired. Should I sign the severance package?
If you have any hesitations about the severance package or a suspicion that you may be treated unfairly by the severance package, you should not sign it. First, you should seek a review of the offer by an experienced employment law attorney. Remember, the company had a lawyer, likely a team of lawyers, design the severance package to favor the company. You should also have an attorney review the agreement to ensure that you are being treated fairly.
What’s the average/expected severance package?
There is no average severance package because every employer is different. Some employers offer a few weeks salary as severance while others calculate the severance package based on your pay level and the number of years worked for the company. Some packages will include payment for unpaid vacation time or even services to help employees find a new job.
What does a lawyer need to know?
In meeting with an employment law attorney about a severance agreement, the first thing the attorney will want to know is whether there is a deadline by which you need to accept the agreement. If the deadline is near, the attorney will likely advise you to contact your employer to request an extension to provide the lawyer with enough time to review and discuss the terms of the agreement with you.
Additionally, the lawyer will likely want you to forward all the relevant documents, including:
● The severance or settlement agreement.
● Employment agreements.
● Company benefits documents.
● Severance plans, if any.
Your attorney will also likely ask you to prepare a:
● Timeline of events.
● Company organization chart.
● List of the relevant parties and witnesses.
The most important factor in determining your optimal strategy is your needs and concerns as it relates to obtaining or modifying an agreement. Some factors that may dictate the optimal strategy to obtain or enhance an agreement are:
● The circumstances leading to your termination.
● Whether you want to maintain an amicable relationship with the employer.
● Your desire to litigate any legal claims.
● Your financial and emotional priorities.
● The amount of money and time you are willing to invest in the negotiation process.
How will my goals factor into the negotiation process?
To negotiate the best possible terms, the agreement must be tailored to your needs. Some plaintiff’s seek:
● A significant cash payment.
● Continuation of health insurance benefits.
● Release from restrictive covenants, such as a non-compete or non-solicitation agreement.
● A mutual non-disparagement provision.
You should outline your priorities by indicating which items or provisions you can afford to sacrifice and which may be deal breakers. This, plus knowing whether you want to maintain an amicable relationship with your former employer, sets the tone of the negotiation.
How likely am I to get what I want out of the negotiation process?
Results can vary depending on many factors, including:
● The strength and weakness of your claim.
● Your length of employment.
● Your ability to obtain future employment.
● Your willingness to pursue legal action.
● Your industry.
● Political tensions within the company.
● Your and the employer’s financial standing.
● Concern that you may breach confidentiality or disparage the company.
● The employer’s aversion to litigation or negative publicity.
What if the employer withdraws the agreement if the lawyer attempts to negotiate the terms?
Although this is a possibility and it is a risk of negotiation, it is rare for an employer to revoke an agreement. The employer prefers that you sign the agreement so it can be assured that no future lawsuits are filed. It is more likely that an employer will offer a token enhancement or refuse to modify the agreement. It is important that you seek the counsel of an experienced employment law attorney in order to best position yourself to achieve your goals with your severance offer.