Finding yourself released from a job can be a shock, and it can leave you with a great deal of uncertainty. Severance packages protect the legal interests of your employer; they also give you a level of protection while you take the next steps in your career and life. But what happens if you need to negotiate your severance? In what circumstances does this make sense, and how do you go about the process?
When to Consider Negotiating Your Severance Package
Receiving a severance package can make you feel all sorts of things – angry, frustrated, undervalued, happy, excited, and a whole host of other emotions. Take a deep breath and carefully think about your next steps. You do not have to accept the severance package initially offered by your employer. Depending on a host of factors, it may be in your best interest to negotiate before you sign.
This is why seeking legal counsel is important, even if you believe an offer is “fair.” An employment lawyer can review your severance package and determine if it meets the conditions of the law and that compensation (e.g. payouts, benefits, PTO, etc.) is appropriate for your unique situation.
You may consider negotiating your severance package if:
- Your lawyer advises that the settlement offer is too low or unreasonable given the applicable laws<
- There are concerns about your ability to obtain new employment and/or with how long that process could take
- There are issues related to discrimination, harassment, bullying, and/or employment standard violations (e.g. not being paid overtime)
- There are other elements that have not been accounted for in the severance package
What to Expect in a Severance Negotiation
Typically, you will go back to your employer with a counterproposal. An employment lawyer can draft a letter for you, detail the issues with the severance offer, and explain why it is unreasonable given your circumstances. It will also set forward what they determine is an appropriate severance package.
Severance negotiation involves you, and your lawyer if you have retained one, a representative of your employer (e.g. HR head), and the employer’s lawyer, if they have retained one. People often picture a contentious courtroom-style process. Typically, though, the lawyers send letters or call each other to work out the details and, ultimately, reach a resolution.
How long will it take? It depends. We know this is a frustrating answer, but a variety of factors play a role. How far apart are your positions? How long does it take one party to respond to the other? How complex is the situation? All of these influence the timeline.
Avoiding Common Severance Negotiation Mistakes
When it comes to negotiating severance packages, people can make a number of missteps, such as:
- Not basing your ask on reason. When you are terminated, it can feel as though your employer owes you. And, to some extent, that is true. At the same time, your counter proposal must be based on reason. It is common for people to ask for far too much, and the law does not support that.
- Focusing on issues that are not relevant to the severance package. Employment issues are people issues, and there are a lot of personal issues that come along with termination. “Why did I get let go and the boss’s best friend didn’t? I’ve worked here longer! This isn’t fair.” It is hard to acknowledge that just because something is unfair does not necessarily mean it is unlawful. It is important to set aside the personal issues and focus on the legal issues involved in severance.
- Not negotiating when you should.
Your employer may have handed you a severance package that was not appropriate for your circumstances. If an offer is too low or does not provide you with the entitlements it should, it is a mistake not to negotiate.
- Not having a lawyer review the severance offer. It is difficult to know if an offer is too low, if it fully complies with the applicable laws, and if you are owed more extensive or additional entitlements. Bonuses, pensions, letters of reference, and other issues are highly complex — and constantly evolving! An employment lawyer keeps abreast of the latest changes in the law and can help you determine if the offer you’ve received is appropriate.
Severance is a complicated, nuanced area of the law; seeking counsel can set your mind at ease, reassuring you that you are receiving an appropriate package. And if not, your employment lawyer can negotiate on your behalf for the entitlements that law affords you.