With the economy uncertain, the news remains full of articles about impending terminations by major employers. Here's an article, for instance, from Reuters reporting on comments by the CEO of Merill Lynch predicting thousands of job reductions once it merges with Bank of America.
Along with those layoffs, and doubtless many others like them, will come severance packages.
Some of my fellow bloggers have addressed this subject from time to time, and good information is worth repeating. Here's a recent post from Connecticut Employment Law Blog, and there are many others available.
If you've been presented with a severance agreement, here are some things to consider.
- Deadlines apply, so act promptly. But if you're over 40 , you're entitled to at least 21 days to review a severance agreement.
- If you sign a severance agreement, you will be giving up legal claims against your employer. Depending upon what kind of claims you do (or don't) have, it might (or might not) be a good idea to sign the agreement.
- Severance agreements often are negotiable. Just because you have been given a "form" agreement, do not assume that the company will not negotiate something better. If you have negotiating leverage in the form of some potential legal claim against the employer, they often will make a better deal.
- Never try to negotiate a better deal directly with your employer before you retain an attorney. It almost never works and In virtually every case that I have seen where this has been done, the employer has refused to go higher once an attorney is involved. That leaves litigation as your only remaining option, and that is not a good place to be. So if you want to argue for more, retain an attorney first and let him do the negotiating for you.
What will a lawyer cost you? That varies by firm. A simple severance agreement review, at which you learn about your rights, the implications of the agreement, and pick up some tips about how to tweak the agreement a little more in your favor, often is done for a modest flat fee.
If you have leverage and want to negotiate a better deal, other arrangements make sense. For instance, my firm's terms involve a flat fee coupled with a contingency fee. The contingency is keyed to the amount by which we are able to increase the employer's opening offer. We share risk with you and you have the assurance of knowing that we will do all we can to improve the offer, since the better we do for you, the better we do for ourselves. Incidentally, we have found that most of our clients opt for this fee arrangement.
There are other possibilities. Just understand that you are free to negotiate a fee agreement with your lawyer that makes sense. You're not tied, to hourly billing, for instance. Ask around until you find the combination of lawyer and fee agreement that you want.