Severance agreements are often open to further negotiation. Companies typically expect that their initial severance pay offer will be met with a counter offer. For example, if you have been offered four months of severance pay, your employer may be willing to pay six or seven months of severance if you ask for it. There is no harm in politely asking your employer to increase the offer. In order to improve the terms of your severance agreement, your leverage must be correctly assessed. Every case involves a story and you need to tell your story in a way that will move your employer to enhance the initial offer. If you need assistance, contact our New York severance lawyers.
Severance Agreement Leverage Points
The leverage points are different in each case and they can include:
- Contributions that the employee has made to the company
- Profits that the employee helped the company realize
- Hardships that the termination will cause
- Potential illegal conduct associated with the termination such as retaliation or employment discrimination
- Non-competition issues
The list above includes just a few examples of leverage points used to negotiate better severance agreements. Your situation should be thoroughly vetted so that each potential leverage point is identified.
How to Make Your Pitch
The next question is how to present your case to the company. Often who tells the story and how it is told can make a big difference. If an executive has allies in the company, sometimes it is best to ask one of them to make the pitch or other times it is best for your lawyer to tell the story. Again, every case is different and the key to maximizing your severance package is to present your case in a compelling way through the right person. Another key point is identifying who in the company should be approached. Should it be a human resources person or maybe another company official with influence is the better person?
Before making the pitch, you also need to identify everything else that you want to obtain as part of the severance package. Of course an increase in the payment will be the main goal, but other benefits should be identified. For example, many of our clients recognize that it is much harder to get another job if unemployed and want to remain involved with the company in some capacity so that they can conduct their job search while still working with the company. It is not always possible to do this, but in many cases we have been able to keep our client involved by agreeing to work on a project as a consultant with company voice mail and email. The date of the termination can be pushed back to allow more time to search for alternate employment. In other cases, we have arranged for positive references and established a protocol for dealing with reference checks. Other more minor benefits like keeping your company laptop and smartphone can be included in the severance agreement. It is all up for negotiation .
If you need help with a severance agreement, please give us a call at 212-571-2000. We have been helping executives and employees negotiate severance agreements for over a decade.