Leaving a job is never easy. Whether it is due to a lay-off, corporate restructuring, or differences in vision, the transition to a new position always presents challenges. A severance package — generally defined as benefits paid to an employee when they leave a company — helps to provide some relief during the transition.
One of the most important things to know about severance pay is it is not guaranteed by federal law or by California law. It may be stipulated by an employment agreement, but even then, a severance package is typically negotiated by the parties. In this article, our San Francisco employment law attorneys offer four tips for negotiating a favorable severance agreement.
In many cases, employees feel immense pressure to take the first severance offer from their company. Please know you are not obligated to accept the initial offer. You have the right to take time to review the agreement. Further, if you are not satisfied, you can ask for modified terms. Employers sometimes subtly make a severance package feel like a “take it or leave it” deal, but the reality is far more complicated.
As was mentioned, severance pay is not guaranteed by law. There is no clause in the Fair Labor Standards Act (FLSA) or another state statute that will give you an automatic right to severance benefits. It is important to understand that employees still have leverage in severance negotiations. Almost universally, a severance agreement will ask you to agree to some (or all) of the following:
In other words, you are giving something up when you accept a severance package. What you are giving up has real, tangible value to your employer. This means you have leverage and you can use it to get a fair agreement. Generally, if the circumstances surrounding your termination could support a claim for wrongful termination, you have more leverage in negotiating a better severance, because the release of liability poses greater value to your employer.
In negotiating a severance agreement, creativity can help to move the process along. In some cases, employers are restrained in what they can offer in a lump sum payment. If this is the case, there may be other benefits that can help ensure you receive the full and fair consideration you deserve.
You do not have to go up against your employer alone. An experienced attorney can help review your case, explain your options, and help you negotiate the best possible severance package. At Bracamontes & Vlasak, our California employment law attorneys have extensive experience representing clients in complex severance negotiations.
If you have questions about severance agreements, we are here to help. For a confidential review of your case, please contact our law firm now. We represent employees throughout the San Francisco Bay Area, including in Daly City, South San Francisco, Pacifica, San Bruno, San Mateo, Half Moon Bay, El Granada and Palo Alto.