Negotiating Severance Pay Agreements
Unfortunately, hard work and loyalty are no longer guarantees of long-term employment. Increasingly, individuals in the workforce have to endure layoffs and reductions-in-force regardless of their work place accomplishments. While employers have the right to reduce their work force, there are laws that limit the criteria they can lawfully consider in deciding whom to layoff. For example, employers cannot take age, race, gender, disability or pregnancy-status into consideration in deciding whom to layoff. Employers may also be prohibited from considering particular layoff criteria (such as seniority or wage rates) that have a "disparate impact" on a particular protected group of people.
In most layoff situations, employers will offer a severance package to the affected employee in exchange for the employees waiving his/her right to sue the employer for employment discrimination or other claims. These severance agreements are almost always drafted by a company-employment attorney with the sole objective of protecting the company's rights. It is highly recommended that you consult with an employment lawyer before accepting a severance package. There are several critical questions you need to have answered such as:
- Do you have any potential legal claims that you could pursue against the company rather than accepting the severance offer?
- Is the amount of severance offer commensurate with the merits of your potential legal claims?
- Is the amount of severance consistent with industry standard in light of other considerations such as your position within the company and your years of service?
- Does the severance agreement provide you adequate protection from criticizing you to prospective employers calling for references?
At Fosbinder & Van Kampen, PLLC, we help our clients answer these questions and can negotiate directly with the company attorneys to enhance a severance package and insert contractual provisions that protect your ability to secure future employment. Our attorneys are statewide and local leaders in employment law.
To schedule a confidential appointment in our Charlotte, North Carolina offices, call us today at 704.323.7886 or contact our firm online.
Working to "Enhance" Your Severance Pay
Our goal when negotiating severance agreements is fairly straightforward: maximizing the amount of severance pay and benefits for the client. Depending on the circumstances, you may have bargaining power to drive up the amount of severance and benefits initially offered by the company –- you simply might not be aware of it. We can help you leverage your position to create a more favorable severance agreement.
Different firms use different approaches in severance pay negotiations. Our general approach in severance negotiations is not to slam the table or to threaten our client’s former employer. We believe our firm has already established a reputation as being aggressive that does not require theatrics or bellicose rhetoric. We’re also sensitive to the fact that it is often not in our client’s best interest to unnecessarily alienate or antagonize his or her employer when it comes time for an employment reference. Furthermore, it is important to recognize that the employer cannot be forced to sign a check for additional severance; it must be persuaded. Accordingly, our approach in severance negotiations (borrowing from Theodore Roosevelt) is to speak softly but carry a big stick.
To that end, we try to collaborate with defense counsel in a professional (yet frank) discussion about the offered severance package and why it is deficient or undervalued in comparison to the merits of the potential claims our client possesses and the recovery obtainable if he or she elected to pursue those claims. Often times, we know the defense lawyers who are representing the employer in question, which also helps to facilitate productive severance discussions.
Despite our best efforts, severance negotiations sometimes fail, which places the client at a crossroads of taking the current offer or pursuing his or her legal claims. We sit down with our clients and methodically analyze the pluses and minuses involved with either decision. In some situations, the right choice for the client is to walk away from the offered severance package and pursue his or her legal claims. Employers are generally willing to pay more in settlement discussions after a lawsuit has been filed, and the potential recovery at trial (should one occur) may dwarf the initial package that was offered.
Non-Compete Agreements
It is essential for the health of any business with any trade secrets to be able to request and enforce non-compete agreements upon termination of employment. Unfortunately, many employers go too far. Don't let the provisions of a non-compete agreement unfairly hinder your career prospects.
Our firm can give you a legal opinion as to whether your non-compete agreement would be enforceable in North Carolina, or assist you in negotiating a revision to a non-compete agreement that will permit you to secure other employment.
The "Neutral Employment Reference" Provision
Not all job separations end happily. When you apply for future positions, your prospective employers will likely call your former employer for a job reference. Many people are under the false impression that employers are required by law to give a "neutral" employment reference; that is not the case in North Carolina. Accordingly, negotiating a Neutral Employment Reference provision in a severance agreement can ensure that your former employer does not sabotage your attempts to secure future employment with a negative reference.
Your career is at a critical stage. Your severance agreement will determine your severance pay and the conditions under which you must seek employment in the future. We provide the sophisticated, thorough, detail-oriented service you need to avoid making any costly mistakes.
To schedule a confidential appointment with a lawyer at Fosbinder & Van Kampen, PLLC, call 704.323.7886 or contact us online today.
