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Tips on getting the best severance agreement

by | Jul 5, 2018 | Firm News, severance agreements |

Employers may offer severance agreements to smooth the departure for terminated employees. In return for certain benefits, however, the soon-to-be former employers want important concessions. Employees can increase their bargaining power by taking certain actions to help assure a softer financial landing after a job loss.

As with other negotiations, the employer’s first offer is not necessarily the best or final offer they are willing to make. Employers want to purchase protection against lawsuits and other problems and may be willing to pay more for a worker’s concessions.

Employers are also more interested in professional reasons, not personal, justifying a more generous severance package. Hard work, lengthy tenure at the company, work accomplishments and other business reasons carry much more weight than personal problems or expenses.

Money should not be the only component of these agreements because the goal is to have the best possible financial cushion. Other terms can include staying on the employer’s health insurance plan for a period or until a new job is found, buying unused leave or payment of job transition expenses.

Employees should also be wary of non-compete agreements prohibiting work for competitors or businesses. Employees should try to prevent or limit these terms, which can restrict their professional opportunities. Options include limiting prohibited employers to a small number of named or defined businesses or having a short time period for the restriction. The amount of the monetary payment can be increased to match the time of the non-compete agreement.

Finally, there is no rush to accept a severance agreement. An agreement may be presented when the employee first learns of their job termination and is suffering from shock and distress. Calming down, reviewing the agreement later and taking the time to prepare a counteroffer is highly recommended. An employee may also be prepared to reject an unreasonable unfair agreement.

An attorney can help with this review, present options and prepare a counteroffer. Lawyers can help ensure that employee’s rights ae protected in these circumstances.