Severance Agreement Negotiations

I have negotiated and/or reviewed over 600 severance agreements over the years - and I frequently have obtained severance for individuals who were not offered any severance by their employer, as well as obtained more severance for individuals than what they initially were offered - I have a strong understanding and successful track record of what are the best approaches to maximize your monetary (salary, bonuses, commissions, benefits) and non-monetary (critical language items) severance recovery.

When an employee’s employment ends the employer often will pay severance to the employee in exchange for a release of potential claims that the employee may bring as well as to buy the now-former employee’s silence from saying negative things about the Employer and Employer’s business in the future. This occurs both in the situation where the employer has delivered a severance agreement to the employee upon termination as well as in the situation where the employer has terminated the employee’s employment but not delivered a severance agreement to the employee.

My job (on your behalf) is to impress upon the Employer the best leveraged reasons (positive arguments and negative arguments) for why you should receive severance/ more severance, toward maximizing the amount of severance that you will receive.

In fact, there are four main scenarios that can result in an employee receiving severance from their employer:

1. the employer delivers a severance agreement to the employee upon termination;

2. the employee delivers a severance agreement to an employee during the employee’s employment, along with a request that the employee accept the severance and voluntarily leave their employment

   • I call this the employer trying to “have their cake and eat it too” approach, and frequently involves a situation where the employer wants the employee to leave their employment but (because the employer is so fearful of litigation) they are not willing to risk terminating the employee first without a signed severance agreement (for fear that the employee will file litigation rather than engage in negotiation and sign a severance agreement);

3. the employer terminates the employee’s employment without delivering a severance agreement to the employee; and

4. the employee (for any one of a number of reasons) wants to quit their employment - employees in this situation should contact me first before giving notice (so that you do not lose valuable leverage that you may otherwise have had towards obtaining severance).

Due to my being an employment attorney, and my extensive experience, I have frequently obtained severance/ additional severance for employees in each of the above scenarios. In this regard also:

• Most attorneys, when they review a severance agreement, they are just looking to see if the contents are fair and just.

• While I of course do this, I also frequently will actively be looking to see if I can obtain more monetary severance (as well as better language terms) for my client. Depending on the circumstances, I sometimes consider such initially-delivered severance agreement to merely be an initial offer by the Employer - to which I would be making a counter-offer.

• And in circumstances where my client has been terminated (or otherwise wants to leave their employment) where no severance has been offered, I will frequently be inquiring into background facts to see if there are potential avenues for my obtaining severance for my client (which severance I consider to be a settlement short of a lawsuit and/or as a monetary exit package in appreciation for my client’s productive employment and valuable achievements for the Employer).

• I attempt to maximize your monetary recovery as well as protect your interests and rights.

For many proactive and valuable suggestions in this regard go to Top Tips for How to Get the Most Severance (that I have written).

Depending on the circumstances, I can make a big positive monetary difference in increasing what you receive, and I can also protect your interests with regard to non-monetary issues (e.g. – reducing/ eliminating restrictive covenants such as non-compete clauses and non-solicitation clauses, limiting non-disparagement clauses, and having there be a truly enforceable neutral reference clause, as well as having the Employer agree in writing not to contest you receiving unemployment compensation benefits, etc.).

Just because the employer in writing offers a certain amount of severance, that does not mean that the amount is etched in stone for the employer to unilaterally decide how much you are to receive - you should have a say in this too! I have often successfully negotiated and obtained an increase - by many thousands of dollars - in the amount of severance that my clients are to receive.

Moreover, I have also frequently obtained substantial severance for employees even where the employer has not initially offered the employee any severance - by pointing out certain “realities” (both positive and negative) to the employer.

In the situation where the employer has delivered a severance agreement to the employee, the employee should also realize that such severance agreement was prepared by the employer’s attorney and contains legalese that the employee should have reviewed by an attorney of the employee’s own choosing.

Separate and apart from the above-mentioned issue of the dollar amount of the severance, frequently there is language contained in the proposed severance agreement that would place the employee at a precarious financial situation (due to a breach or even a claimed breach, of the agreement, and otherwise, where the employer has abusively inserted a forfeiture clause, a liquidated damage clause, an overly expansive non-disparagement clause, a non-compete/ non-solicitation clause, and/or a 1-way attorney fee clause), and sometimes there is language missing from the agreement that should properly be in the agreement (e.g. – neutral reference language, etc.). I frequently can speak with the employer/ employer’s attorney to correct the situation and protect my client.

Call me to briefly discuss if it makes sense for you to come in for an appointment to my Chicago loop office to further discuss your employment situation.