Severance Agreements

 

Being presented with a severance agreement is both a cause for alarm and an opportunity. It’s a cause for alarm because you have lost your job, and now you have a thousand questions circling in your head. How do I feed my family? Will I lose my house? Can I get unemployment benefits? How long will it take to get another job? Should I just sign the severance agreement to get the money as soon as possible? I have no income, so how can I afford an attorney to help me through this difficult time?

But it’s an opportunity because, in our experience, many if not most people who lose their jobs sooner or later end up in a better position. With some, it happens quickly. Some take longer. Some end up with another employer. Some develop and run their own business. The thing to remember is that losing a job does not have to mean the end of the world. And sensible fee arrangements exist that will enable you to get the legal help that you need. So take a deep breath and move forward in a businesslike way.

If you have reached age 40, by law your former employer must give you 21 days to review a severance agreement. Once you decide to sign you have another 7 days to change your mind. There’s no need to act hastily.

Think carefully about why your former employer says that you were fired. Does it make sense? Are there contradictions or inconsistencies in the employer’s logic? Have things happened, or have people said things, that make you think the reason the company has given you may not be the real reason?

Make an appointment to speak with an attorney as soon as possible. An experienced employment attorney can evaluate the situation and advise you on the terms of the severance agreement that you’ve been asked to sign. As important, in some cases, there may be legal weaknesses in what the employer has done so that a better deal can be negotiated in exchange for signing the agreement. There may be, for instance, a plausible argument that you have been selected for separation for an unlawfully discriminatory reason. The employer may ask you to sign a non-compete agreement as a condition of receiving severance, and when was the last time that you negotiated one of those? Probably never? With your family’s future at stake, this is not the time to engage in self-help. Someone who tries to negotiate a better severance deal on her own is not being frugal – she’s being a kamikaze.

Having lost your source of income, how can you pay for the legal help that you need? Different attorneys have different ways of charging for their services. Do not make the mistake of assuming that you have to pay a high hourly rate for good representation. You can if you want to, but there are better options available. We have seen attorneys who charge a flat percentage of your entire severance payment, as much as a third of it. Do you really want to pay that?

Our philosophy is different. We have a program that ensures that your expense is manageable, yet rewards both you and us when we are able to increase the company’s initial severance proposal. Contact us and we’ll be happy to explain how to make the process a win-win and as anxiety-free as possible.