Employees subject to lay-offs and other terminations are dealing with a multitude of emotions and insecurity while promptly clearing out their desk. During this stressful event, and even earlier in companies that are restructuring or engaged in layoffs, employees should consider the contents of severance agreements.
Former employees, a trusted manager or longtime co-worker may be a good source on an employer's layoff policies. If a reorganization may be underway, the human resources office may provide information on their standard severance package. Employers covered by unions may have mandated severance packages.
The best time to negotiate severance is once an offer is made at hiring. Lay-offs and terminations may be good times depending on the circumstances. Packages that include health insurance and severance pay based on the workers' salaries should be considered.
Immediately after a layoff or termination, employees should seek severance and other possible opportunities with the company, such as freelance or contract work. Unemployment compensation should also be sought.
Some companies may also offer outplacement services. These can help draft an exit statement on how the employee left that employer and a position statement on future career plans, redraft a resume, organize references and locate potential new employers.
Companies that offer severance packages for benefits such as payments or COBRA usually make them contingent on a nondisclosure agreement. However, it is important to assure that these do not prevent a worker from being immediately employed elsewhere. Even though these provisions are rarely enforced, some agreements may stop benefits if a worker becomes employed for a specific time.
An attorney can help review and draft these agreements. They may also present options to workers that improve their negotiating position in some circumstances.