Severance Negotiation

Have you been fired or laid off of your current position, and now being asked to accept a severance package you feel is inadequate? Were you coerced into a severance agreement because you felt you have no other options? Has your employer failed to clearly define your position, resulting in your termination? Negotiating an exit from a job is often as important as negotiating a new position. There are many issues to consider, including aspects that may affect your relationship with future employers. There are many situations where a company will renege on agreements, and fail to follow through on employment, front-end promises, duties, compensation and benefits. Or the company may simply seek to terminate an employee for reasons that are unlawful. Rubin Law can help you determine whether you have been treated unlawfully, and help you to design and execute an appropriate exit strategy, often by way of negotiation without litigation (though with the prospect of litigation if reasonable negotiation falls through) .

The Rubin Law Corporation can assist with:

1. Determining whether your separation from the company is lawful (Are you being wrongfully terminated or denied compensation or benefits due such as stock options bonuses or commissions?)
2. Defining all terms and provisions of the agreement so you understand it
3. Legality of the document under State and federal law
4. Any issues of concern related to future employment or other factors
5. Advise on any additions/changes to the agreement
6. Non-compete, confidentiality, and non disclosure and trade secret clauses (See separate section on Non-Compete Agreements)
7. Methods of negotiation to achieve the desired exit strategy including consideration of litigation if negotiation fails

Got questions about severance agreements? See below for answers to common questions.

What is a severance agreement?

A severance agreement is typically a contract between the employer and the executive or manager to set the terms of what the employee receives upon separation from the company. In exchange for certain types of compensation and benefits, the employee releases the employer from any potential liability.

Various benefits can be included in a severance agreement including a lump sum payment, salary continuation, eligibility for early retirement, payment of continued healthcare, letters of reference and job placement services. Such documents may also include terms on enhanced stock options, payment of accrued commissions, and bonuses. In exchange for these benefits, the employee is asked to sign a release waiving any and all legal claims against the employer, such as claims for back wages, wrongful discharge or possible discrimination.

The first step in analyzing a separation agreement is determining whether in fact you have any valid legal claims against the company. If you do, then the terms of the agreement can be negotiated up-- because the company is then in a position of compensating you to cover any legal wrong for which they are liable.  So initially you are inquiring whether you were fired for some unlawful reasons, such as whistleblowing, discrimination, or a public policy violation?

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Just got a job? Plan for when you lose it!

The era of the long term career with one company simply does not exist any more. Most executives and managers will transition in and out of multiple employment situations in the course of their working lives. It is necessary to pre-plan for this departure. This helps protect the employee and the employer from unnecessary litigation should unforeseen problems should occur in the office.

Employer and executive should also address, in writing, how voluntary resignations will be handled. The circumstances under which the executive can resign for good reason and receive a severance package should also be defined.

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Rubin Law Corporation - (310) 385-0777 Specializing in Contract Law Services Contact us today for a consultation!