Severance Negotiation

Employers occasionally offer money or other benefits to a worker or group of workers during layoffs or terminations. This is called a “severance” and is rarely required by law unless an employment contract specifies payment.

So why would companies offer a severance if they aren’t required by law? Some may provide severance to ease the financial difficulties a worker will have searching for a new job.

Most companies, however, offer severance for much more pragmatic reasons. Employers understand they face potential future legal liability from ex-employees and a severance payment can eliminate that liability. Severance payments require the worker to sign a new severance agreement, which is a contract stating the worker will not later sue the employer for any reason in exchange for the additional money. The employee receives the benefit of additional weeks or months of wages, and the employer benefits from not having to worry about being sued in the future.

Understand the Costs & Benefits of Your Severance Terms

Workers that receive a severance offer should seek the advice of a lawyer to best understand the costs and benefits of signing away one’s rights.

Carter Law Firm has helped numerous workers evaluate whether signing a severance agreement is in their best interest and also helped workers negotiate a better severance offer.

It’s vitally important to identify the strengths and weaknesses of particular circumstances in the hope of identifying the greatest amount of leverage a worker may have when negotiating with an employer or that employer’s legal counsel.