Employment Severance Negotiation and Agreements


Our Texas Severance Negotiation Lawyers can help you decide whether the severance you were offered is fair. We may be able to get you a better severance. If you were offered no severance at all, we may be able to help you get it. We can review the terms of the agreement given to you by your employer – an agreement which was written with your employer’s best interests in mind. We can provide you a timely and thorough evaluation of our ability to improve them. We can also review your employment and termination history to obtain severance for you if you have been offered none at all. Email us at jspencer@spencerscottlaw.com for fastest response. Or call today at 972-458-5319. You will be speaking to an attorney within 24 hours. We can go over your situation and help explain next steps. Read our bios here.

OUR SEVERANCE NEGOTIATION LAWYERS WILL PRESENT YOU WITH A PLAN OF ACTION:

  1. Our lawyers can review and explain paragraph-by-paragraph and word-for-word the severance agreement presented to you and can make sure you understand the terms and implications.
  2. Our lawyers can review the circumstances of your employment and termination if you were offered no severance at all.
  3. A detailed and individualized plan will be presented to each client that reflects the client’s particular circumstances, leverage and negotiation needs. This plan may range from behind-the-scenes advice and “ghost writing” to a team of lawyers and tax specialists or other experts.
  4. We can negotiate directly with your employer to enhance your severance. It is often quite helpful to have an experienced attorney negotiate on your behalf to demonstrate that you are serious about getting a fair severance package.

If you’ve recently been asked to sign a severance agreement, contact Spencer Scott. Our skillful severance lawyers are ready to review your situation. Email us directly at jspencer@spencerscottlaw.com or call us at 972-458-5319.

WHAT TO DO TO OBTAIN A REASONABLE SEVERANCE AGREEMENT IN TEXAS

If you find yourself in the often distressing position of a layoff, position elimination or outright termination, a severance package may help you in your ability to bridge the gap between jobs.

What is a severance package?

A severance package contains pay and benefits that an employee is offered when he or she leaves employment with a company. It may include compensation or payments for a variety of reasons including whether your employer fears that you will file a claim against it, years of service, unused vacation or sick leave time, bonuses, and the like. It may address the continuation of insurance coverage, stock options, disability benefits and out-placement services to help you find a new job.

In exchange for receiving a severance package, most employers will require the employee to sign a “severance agreement.” Most severance agreements will include not only terms regarding the payment of compensation and benefits but also a release of any claims the employee may have against the employer. The agreement might also include a clause limiting your ability to go to work for a competitor or in the same or similar field of work. There may be a clause that prohibits you from saying something negative about your employer.

What should you do if you are offered a severance agreement or are offered no severance at all?

1. Take your time before your sign.
Do not rush in and sign the agreement your employer has offered you until you take the time to analyze the offer, negotiate or retain a lawyer to assist you. If you are over 40, the law requires employers to include in most standard severance agreements a minimum of 21 days to consider it. There is a lot to do to make sure you understand the agreement offered to you and to decide whether to negotiate for improvements. Take this time.

2. Gather information.
Assemble documents and information you need to determine exactly what has been offered to you, what has been left out and whether you can improve your severance through negotiation. Locate your original offer letter, employee handbooks, documentation of the company severance plan, if there is one, all emails concerning issues that may be grounds to claim wrongful termination or unfair treatment, and documentation of your health and disability insurance, retiree medical benefits, vacation time, compensation and stock options. These may also include non-compete agreements, intellectual proprietary inventions agreement or non-disclosure agreements and mandatory arbitration agreements. Do not retain or forward to a personal email address any of your employer’s confidential business information or trade secrets. Retaining such information is not “leverage” in severance negotiations and may well hurt your negotiation position or result in a lawsuit against you.

3. Review the package in detail.
Do not sign anything until you understand each and every term. Determine if the package leaves out sources of compensation insurance or benefits. Do not sign something that says you are resigning while you consider your options. Determine how what you have been offered stacks up against offers made to other terminated employees or other standard offers in the industry. Consider hiring an attorney to fully explain the legal implications of each of the terms.

4. Think of your leverage points.
Think of the reasons you were terminated. You may have grounds to claim wrongful termination or to negotiate a better severance package if you were fired for a wrongful reason including any of the following: discrimination for sex, gender, age, religion or national origin; discrimination due to a legitimate illness, disability or absence or to deny accrued benefits; retaliation for having made workers’ compensation claims or sexual harassment claims; violation of a written or implied contract; retaliation for whistleblowing or speaking out; or as part of a large layoff without proper notice. If you sign a severance agreement without negotiation, you likely will be giving away these rights forever.

5. Decide whether to negotiate.
Many employers will negotiate severance on some level. In some situations, an employer may be able to revoke an offer of severance if you reject the offer. There may be a risk associated with negotiating your severance agreement in those circumstances. Most of the time, however, severance is negotiable. And you will never know if your employer will negotiate and give you a better offer if you do not ask.

6. Decide what to negotiate.
The most common terms to negotiate include:

  • The total compensation paid to you in the package, including cash, prorated bonus, stock options, payment for unused vacation time and the like;
  • Insurance coverage and disability benefits. For how long and at whose expense?
  • Letters of recommendation or a favorable statement regarding your “voluntary separation” rather than termination;
  • Out-placement assistance;
  • Your ability to exercise unvested and vested stock options;
  • The terms of or release from any non-compete.

7. When in doubt, consider hiring a lawyer.
In addition to the shock of being let go by your employer, you may be faced with significant financial distress. These factors can interfere with your ability to objectively assess your rights. Deciding whether to accept, reject or negotiate a severance package can have significant financial implications. You should consider hiring an attorney to review the severance package, help you decide if there is room to negotiate or negotiate directly for you.

For more information, please read our article on How to Improve Your Severance Package.

Our severance team is based in Dallas, TX but we negotiate severance packages across Texas.

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