Severance Negotiations



After years of dedicated service, your company has suddenly terminated your employment and offered you a severance package. You will likely wonder whether the severance package is negotiable. The answer will depend on the circumstances surrounding your discharge. Many employers will condition a severance package on a release of your legal claims, in which you legally promise not to sue the company in exchange for a certain payment. Thus, your leverage in negotiating a more generous severance package typically hinges on the strength of your legal claims. In general, the stronger your legal claims, the more severance an employer will pay.



You must be cognizant of your deadlines. For example, if you are 40 years old or older and your employer is asking you to release any claims you may have for age discrimination, the Older Workers Benefit Protection Act, requires that you be given 21 days within which to consider the agreement. The Act also requires a 45 day review period where a group or class of employees is affected. In either scenario, you will have 7 days after you sign the severance agreement to revoke your acceptance. If you are under 40 years old, your time period to review a severance package is at the complete discretion of your employer. Typically, we have seen deadlines span just a few days to several weeks.



As soon as you receive a severance offer, make it a priority to find an attorney who can evaluate your potential legal claims and help you understand the numerous pages of legalese drafted by your employer’s counsel. If your termination appears to be based on your status within a protected class – such as age, race, gender, or handicap – you may have significant leverage to negotiate a more generous severance package. This will be a discussion for you and your attorney.



Finally, it is not uncommon for employers to require departing employees to affirm non-compete obligations, which may leave you in a precarious financial position. Keep in mind that the terms of such restrictive covenants have been drafted by the company’s attorney to solely serve the employer’s interest. It is essential that you understand your employer’s expectations before you accept any severance and, where necessary, narrow the breadth of your non-compete obligations to ensure that you can more quickly become gainfully employed.





If you have been wrongfully discharged, denied unemployment benefits or have any employment issue, please call Boston's leading employment law firm for a free consultation at 781-816-3950 or contact us online.



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Attorney at Law