Severance Payment Mistake #1
“There is no law that requires severance pay.” True, but then why do all companies pay compensation?
There is no law that severance pay must be provided, but all companies provide severance pay because the alternative is so much worse for them. Keep reading…
Severance Payment Mistake #2
“I am an at-will employee, so I cannot receive severance pay.”
At-will employment simply means that you are employed for an unstated duration, not a fixed period of time. It means you can leave at any time and your employer can terminate your employment at any time, but the termination must be for legal reasons and the dismissal must take place legally! Being in an employment-at-will status, or having an employment-at-will contract, doesn’t mean you can’t get severance pay and a big severance package because you have leverage…
Severance Payment Mistake #3
“I have no leverage to get severance pay and I don’t want to ‘burn bridges’ with my company.”
Whether you’ve been fired for poor performance, fired, outsourced, or quit, your employing company fears negative publicity, ex-employee complaints to board members, the possibility of being sued, and damaging time and expense. of litigation, and anyone who speaks ill of the company. The companies want you to go quietly and stop any possible controversy. All companies expect to negotiate severance packages in exchange for a Separation and Release Agreement, so you will leave not only on ‘good terms’, but on your own terms!
Severance Payment Mistake #4
“My company is bankrupt or being acquired, so there is no severance payment.”
Most severance packages are provided when companies are strapped for money, file for bankruptcy, or simply cut costs by layoffs. In fact, the severance packages provided during these unfortunate events are often more generous.
Severance Payment Mistake #5
“My severance package is non-negotiable and must be signed immediately.”
HR and your boss will pressure you to take the check they’ve already cut and sign a release agreement right away. Don’t do it as no work situation is ‘take it or leave it’. Tell them you have to think about this situation. They will not and cannot withdraw the offer of compensation, even if you ask for more! In fact, there are federal laws that require you to be given three weeks or up to 60 days to consider the settlement, more than enough time to negotiate a better severance package.
Severance Payment Mistake #6
“I can negotiate a severance package on my own.”
People who do this always underestimate their own worth, what their company has provided to others in the past, and what their company will provide them in a severance package. In addition, they leave out the compensation, benefits, and legal protections that can be negotiated and must be included in all severance packages.
Severance Payment Mistake #7
“I can review and understand the legal language within the Separation and Release of Claims Agreement that my company wants me to sign in exchange for my severance package.”
All separation and release agreements state that you should consult with an attorney and have the attorney review the release of rights before signing it. This is for your protection, as you may not understand or even see the restrictive covenants hidden within the separation/release agreement and within your original employment contract. An experienced employment attorney with human resources experience is best qualified to review a separation/release agreement, not your family or business contract attorney.
Severance Payment Mistake #8
“I will hire a lawyer to represent me.”
Severance packages are created and implemented by your friendly Human Resources Department. But, if you hire an attorney to represent you in negotiating a severance settlement, your friendly Human Resources Department SHOULD and will turn you and your attorney over to your corporate Legal Department and your attorneys. You will have a hard time negotiating compensation, as corporate lawyers always take a strong stance against opposing lawyers. Your matter will be legally escalated to a legal battle. And, it’s another story if you start a lawsuit. The best severance offers come from human resources departments.
To avoid these mistakes, you need legal AND human resources experts on your side to help you get the best severance package.
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