Few people are thinking about it on their first day at a new job, but someday they will reach the inevitable end of their run with that company. When that day does come, there are some individuals who could find themselves parting ways with the company on less than amicable terms.

Whether through the fault of the employee or financial distress of the company or industry, when an employee is let go there is often a severance package offered. If you’ve been offered a severance package, or fear one is in your near future, the last thing you should do is blindly sign that document and ride off into the sunset.

Why You Should Negotiate a Higher Severance Package

Accepting a severance package at face value is like buying a car at full MSRP and not trying to haggle. When you allow that to happen, the other side reaps all the benefits while you are left with little more than a pittance in return for your hard work for the company through the years.

There is no standard severance package offer that applies to all industries. Most businesses offer employees one or two weeks’ pay for each year of employment with the company. Beyond that, there is nothing resembling a standard for company severance packages. Given this information, it is a good idea to negotiate a higher severance package because companies are bound to start at the smallest number they deem appropriate.

Negotiating a Higher Severance Package

There are three basic steps that should be taken in negotiating for a higher severance package. First and foremost, counter the company’s offer on payment terms. If you’ve put in more than a decade of steady performance for this company, ask for a slightly higher amount than is being offered in the severance package payout. Remember, the company isn’t offering you the top dollar payout in their offer.

Secondly, don’t forget to ask about extended benefits. This can be particularly important for several reasons. For starters, if the company is not willing to budge on a request for a higher payout, getting extended benefits beyond your termination is a good strategy for getting some gain from the severance package and minimizing your financial burden for a given period of time following termination.

Additionally, it may be vital to your family to have that extended health benefits coverage. If someone in your family, or you, yourself is/are fighting poor health at the moment, this would be a disastrous time financially and physically to lose health benefits.

Finally, discuss an exit message with the terms of your severance package. The exit message is important because it can determine the value of a soon-to-be-former employer’s voice as a reference for future job positions. Ensure that the message behind your exit from the company has a positive slant on it so that when you use that former employer as a reference it doesn’t look suspicious.

And remember, when you are negotiating a severance package there are other details regarding your employment that should not be overlooked such as:

  • Accrued vacation time (for which payment is mandatory in California)
  • Company stock options
  • Retirement plans with company investment
  • Bonuses and commissions that would be lost

These were all conditions of your employment with the company and need to be taken into consideration when negotiating your severance package.

Be Aware of Your Rights

Regardless of the circumstances surrounding your impending severance package, you have rights that should be assessed. While it would be a sign of bad faith to bring a lawyer to a severance negotiation, you are entitled to some time to look over the documentation to ensure your rights are being protected in the process.

An experienced lawyer can help you determine the following regarding your rights:

  • Do you have written, verbal, or other rights that will be violated by this severance offer?
  • Do you have a basis for claims against the company that would be settled in this severance package?
  • Do you possess any leverage to engage the company in severance negotiations?

Trained lawyers will be able to help you look over the severance offer from your employer and determine if your rights are being protected within the wording of the severance package. Additionally, a lawyer could help identify discrepancies between your original employment contract (if applicable) and the details of your severance package.

Finally, with a lawyer in your corner (though not physically present) during severance package negotiations, it shows the company that you will not be taken advantage of and might provide leverage in negotiations. The last thing any company wants is an employee coming back to haunt them with legal action later.

Signing a severance package clears the company of future legal action. Before blindly putting pen to paper seek out a consultation with an attorney. An experienced attorney can help guide your negotiations and provide tips on things you should and shouldn’t be fighting for in your severance package negotiation.

Click here to contact Carlos D. Gonzalez, PLLC, and get your initial consultation free.


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