When workers have been “let go” in one way or another, they may be offered severance. Most of the time, this compensation and benefits extension opportunity is negotiated when a worker signs their initial employment contract. It is often possible to negotiate a better severance offer at that time, and it may even be possible to negotiate a better offer at the end of a worker’s tenure of employment.
Many employers provide severance packages to ease the transition for departing employees, but initial offers are often just a starting point. With an informed approach and legal support, employees may be able to secure additional benefits, extended compensation and/or better terms in their severance agreement.
Leverage
To negotiate a better severance offer, it’s important to understand the reality of leverage. Employers typically offer severance to minimize the risk of future legal action, better ensure confidentiality and maintain goodwill. If your employment is wrapping up and you have claims against the company – such as wrongful termination, discrimination or harassment – you may have added leverage in negotiating a higher severance offer.
In California, employees are protected by laws against workplace discrimination and retaliation, so if these factors apply to your termination, it may strengthen your negotiating position. Additionally, if you have a long tenure, specialized knowledge and/or a high-level role, your employer may be more inclined to negotiate to secure your cooperation.
There are several components within a severance package that you can negotiate. They include severance pay, extensions of health benefits and other employment-related perks, outplacement services and even adjustments to the terms of any non-compete or non-disclosure clauses that may affect you.
Although negotiating a better severance offer isn’t always possible, it is often worth a try. Seeking legal guidance is a good way to get started.