As someone who is about to be laid off or terminated, negotiating a severance agreement can seem like a daunting prospect. It’s understandable to feel uncertain about how to proceed, but rest assured that with proper preparation and access to the right information, you can achieve the best possible outcome.
It’s important to remember that you have legal rights and options, and by utilizing the tips and resources available to you, you can successfully negotiate a severance agreement that protects your interests and sets you up for a brighter future.
In this article, we’ll provide you with 10 tips on how to negotiate a severance agreement in California, as well as information on how the employment lawyers at Eldessouky Law can help you with your severance negotiations.
How to Negotiate Your Severance Package
Here are the key steps for negotiating your severance package successfully:
1. Keep Calm and Weigh Your Options
When faced with the possibility of being laid off or terminated, it’s natural to feel overwhelmed and emotional. However, it’s crucial to remain calm and think strategically.
Employers who offer a severance package are usually doing so in order to protect their interests, and you should approach negotiations with the same mindset.
Don’t rush into accepting the terms of a severance package, even if your employer is pressuring you to do so. Take your time to carefully evaluate what’s being offered.
A clear-minded approach will help you identify and prioritize your goals, negotiate the best possible outcome, and ultimately make an informed decision.
2. Understand Your Rights
If you’re facing the prospect of negotiating a severance agreement, it’s crucial to first understand your legal rights. Living in California, it’s important to know that it is an at-will employment state. This means that your employer has the right to end your employment at any time for any reason, as long as it’s not illegal. Knowing your legal standing is essential to approaching the severance agreement negotiation process with confidence and clarity.
As you navigate the process of negotiating a severance agreement, it’s important to remember that you maintain certain rights as an employee. These include the right to review the agreement and negotiate the terms to ensure they align with your best interests, as well as the right to legal representation during the process.
It’s crucial to keep in mind that in the state of California, severance agreements are legally binding. Therefore, it’s essential to fully comprehend the terms and feel comfortable with them before putting your signature on the dotted line.
If you are being offered a severance package, chances are high that the employer has specific reasons for wanting you to sign it. It’s important to understand why they are offering the package, and what their expectations are.
3. Read the Agreement Carefully
When reviewing a severance agreement, it is critical to read it thoroughly and ensure that all of the terms are comprehensible. Pay close attention to important details such as the severance pay amount, the length of benefits, and any non-compete or non-disclosure provisions.
Don’t sign anything that you don’t understand.
By signing a severance agreement, you are typically giving up certain rights to pursue a legal claim against your former employer. In addition, some severance agreements have outlandish non-compete clauses that can leave you without the right to work in your field for an extended period of time.
If there is ANY language whatsoever that you have difficulty understanding, speak with an attorney who has experience negotiating severance agreements to make sure that you are not signing away any of your rights.
4. Determine Your Goals
When offered a severance agreement, take time to consider your objectives. Think about what you want to gain, such as higher severance pay or a longer benefits period.
Keep in mind that receiving a severance package offer shifts the power dynamic in your favor, giving you the chance to negotiate for your desired terms. This is your opportunity to protect your rights and ensure a fair deal.
To stay focused on your goals throughout the negotiation process, write them down and refer to them as needed. It’s important to keep your objectives in mind, even as you attend to the details.
You want to walk away with the best possible outcome and a deal that serves your interests.
5. Don’t Sign Until You Consult an Attorney
Don’t sign a severance agreement before speaking with an employment attorney. Severance agreements may:
- Waive rights you would have to sue your employer in the future (regardless of having a legitimate legal claim against your employer)
- Include a clause that prevents you from disparaging the company or its employees
- Require non-compete clauses prohibiting you from taking up a job in your field for an extended period of time.
Once you sign, you are legally bound by the terms listed in the document. Consulting an employment lawyer can help you better understand your rights and make sure that any agreement is fair and just.
6. Consult with an Attorney
When it comes to negotiating a severance agreement, seeking the advice of an employment lawyer can make a huge difference in protecting your legal rights. It’s important to carefully consider all the implications before signing, especially if you were singled out for a layoff or termination.
Employers may use severance agreements to tie up loose ends and prevent legal disputes, but if you suspect foul play or violation of employee rights, it’s crucial to seek legal advice before signing. This is especially true if your employer is offering compensation in exchange for signing a severance agreement.
Remember, once you sign a severance agreement, you forfeit all your legal rights against your employer. In California, these agreements are binding, which means there’s no going back once you’ve signed. Protect yourself and fully understand the implications of what you’re signing.
If you have any doubts or questions about your severance agreement, a California employment attorney can help you understand the terms and provide guidance. Don’t hesitate to contact our office at 714-409-8991 or fill out one of our online contact forms for assistance.
7. Be Sure to Consult with a Trial Attorney
Consulting with a trial lawyer is crucial when negotiating severance agreements.
A trial attorney will understand:
- If you have a valid claim against your employer
- Whether or not you have a right to demand additional compensation
- Whether or not the agreement is fair and reasonable
- The next steps you need to take in order to protect your rights should it be in your best interest to deny the agreement
- What it will take to file a lawsuit and obtain a judgment or award if necessary
Choose the best attorney for the job to protect your rights and achieve a fair outcome. Contact the trial attorneys at Eldessouky Law for assistance in navigating your severance agreement and achieving a favorable outcome.
8. Be Professional and Polite
When negotiating a severance agreement, it’s important to be professional and polite. Don’t make demands or threats, and avoid getting emotional. Instead, approach the negotiation as a business transaction and focus on finding a mutually beneficial solution.
Maintaining a good relationship with your former coworkers and employer is important for your professional reputation and can even impact future job opportunities. In today’s interconnected world, it’s not uncommon to encounter former coworkers at a new company or to have a potential employer speak with someone at your former workplace.
If you leave on good terms and maintain a positive relationship with your former employer, it can demonstrate your professionalism and integrity to others in your industry. This can lead to recommendations and referrals that can help you advance your career.
On the other hand, if you burn bridges during the negotiation process, it can harm your reputation and limit your future opportunities. Negative feedback from former coworkers or employers can spread quickly and potentially impact your ability to secure future job offers.
Therefore, it’s important to handle negotiations with tact and professionalism, even if you’re frustrated or unhappy with the outcome. Remember that the way you conduct yourself during the negotiation process can have lasting effects on your professional reputation, so it’s best to stay cordial and maintain good relationships wherever possible.
9. Know What You Can (and Cannot) Negotiate
When negotiating a severance package, it’s essential to understand what elements are up for negotiation and which ones aren’t. This knowledge can help you avoid wasting your time and ending up empty-handed.
One area that may be negotiable is insurance coverage. Federal and state laws often dictate the level of insurance coverage that employers must provide to their employees. However, there may be room for negotiation in terms of out-of-pocket expenses or other financial assistance to help cover medical costs. Quite often, employees prioritize their health coverage when faced with termination. To maintain their existing plan, doctors, and network without any disruption, enrolling in Cobra is the only viable option. It is mandatory for employers to inform their employees about this option at the time of termination. However, Cobra can be exorbitantly expensive and may not be feasible for recently terminated employees. Nevertheless, we have been successful in negotiating a separate fund to be directed towards Cobra to ensure continued coverage until the employee secures their next move.
Our office has successfully negotiated for employers to continue paying for health insurance through Cobra even after the termination date.
Other elements that may be open to negotiation include the amount of severance pay, the length of time you’ll receive it, and whether or not you can negotiate other benefits, such as continued access to company resources or a positive reference for future employment opportunities.
By understanding which elements are negotiable and which ones are not, you can approach negotiations with confidence and clarity. This can help you to create a severance package that meets your needs and priorities, while also being fair and reasonable for your employer.
10. Don’t Focus On Just the Salary or Dollar Amount
As you negotiate your severance package, keep in mind that your compensation is not limited to your base salary. Take into account other benefits that you may have earned, such as unused paid time off or upcoming bonuses. It’s important to know that some states require employers to pay out accrued PTO or sick time, so be sure to research the applicable laws and your rights.
Taxes are also a factor to consider. Depending on when you were laid off or terminated, your income may still be subject to taxes if it’s above a certain threshold. Additionally, any severance pay you receive will be subject to taxes. Make sure you take these variables into account during the negotiation process to get a clear understanding of your final compensation.
Finally, be aware of overly-restrictive non-compete clauses that some severance packages may include. These clauses can negatively impact your future job prospects, so make sure you understand the implications before accepting any terms.
Speak with the Employment Lawyers at Eldessouky Law Today
If you need help to understand your severance agreement and deciding whether or not to sign it, the experienced trial attorneys at Eldessouky Law can help. Contact us today to learn more about your rights and options.