If you are laid off, you might be able to negotiate the terms of your severance agreement.
If you are ever presented with a “pink slip,” you do not *have* to sign it right away. Your employer may offer you a “release” in exchange for a financial severance package and may pressure you to sign before leaving the room. They are required to give you a “reasonable” amount of time to review the terms before signing.
Do I have to sign the severance agreement on the spot?
It is not uncommon for an employer, when terminating an employee, to offer the employee a severance package in exchange for a signed release. These deadlines are usually irrelevant. The employer WANTS you to sign because it releases them from any legal action you could take.
Remember that the company really, really wants you to sign that release letter, so you don’t sue them or say disparaging things about them.Paul Levy, Senior Advisor at Lax Sebenius LLC and co-author of “Don’t sign anything: A guide for the day you are laid off.”
Most employment lawyers suggest asking your employer for a few days to a week to review the terms of the agreement. Almost all severance agreements come with lots of conditions. You’ll want to carefully read and understand all of them before agreeing to them.
Under the Older Workers Benefit Protection Act (OWBPA), any terminated employee over 40 years of age who is offered a separation agreement must be given at least 21 days to consider it. That law also gives the older worker another 7 days to revoke it.
Should you hire a lawyer if you are laid off?
Whether you were an at-will employee or had an employment contract makes a big difference in your rights post-dismissal. According to the National Conference of State Legislatures (NCSL), an at-will employee can terminate their own employment for any reason, at any time. Here is a map of at-will states combined with states that allow public policy exemptions and covenants of good faith.
Most employment lawyers agree that it’s a good idea to review the terms of a severance agreement with a licensed attorney before signing. Often agreements include restrictive covenants like non-compete and non-solicit agreements. These can limit future job opportunities! We’ve unfortunately seen people have to move their families out of state because they signed restrictive non-compete agreements under duress.
There are no laws that require a company to provide a severance package to employees who are laid off. However, most workplaces offer some form of severance. Sometimes severance terms are outlined in the employee handbook (for example, according to SHRM, the majority of employers offer a severance package with one to two weeks of paid salary per year worked. Some companies provide more, some less.)
What is included in a standard Severance Package?
Typical Agreements include:
- Your severance pay terms
- Your vacation pay terms
- Cobra (Benefits) Information
- Return of Property
- Non-compete Clause
- Confidentiality Agreement
- Unemployment Information
- A General Release of Claims and Covenant Not To Sue
9. Companies often include JOB SEARCH SUPPORT services (known as outplacement) in addition to paid salary.
An outplacement package for a more junior employee might be valued at anywhere between $500 to $5,000. For a senior leader, this package could be valued at $10,000 up to $50K+
** Some companies will let you ask for the cash equivalent to purchasing your own job search support.**
💴 Depending on your situation and what the package includes, you might be better off taking the cash and hiring your own team.
Why you should negotiate for the cash equivalent of outplacement
✔️ Hiring your own resume writing company will allow you to hold the company accountable for the delivery of the final product.
❌ Not all resume writing companies are equal.
❌ Some outplacement companies just offer a “resume review” and not done-for-you branding, writing, and design.
❌ Better doesn’t always mean more expensive. Smaller, boutique firms often do not have the overhead of a large national “brand”.
✔️ Hiring your own career coach will allow you to select someone that you *actually like*. You’re going to end up spending a lot of time with this person.
Most outplacement firms don’t work for you.
Remember, not all outplacement companies are bad; some do really great work, but we do hear a lot of stories from disgruntled job seekers who felt like they were just being “herded” by the employer-sponsored outplacement company or that they were just given video modules to watch instead of custom one-on-one work.
In 2009– during the Great Recession– Wall Street Journal covered the shortcomings of many outplacement firms. The most common complaint is that the services provided by firms like Wright Management and Lee Hecht Harrison are “boilerplate” and “lacking for middle to upper management.” Alison Green of “Ask a Manager” summarized it well in her article, “apparently (many) outplacement firms suck,” by saying, “For some reason, the “we’ll help you get hired” industry is full of people who have no clue what they’re talking about — maybe because anyone can read a couple of outdated job-hunting guides from the 1980s and call themselves an expert. And it helps that their target audience is anxious and vulnerable.“
Briefcase Coach as an alternative
Consider asking your employer for the cash equivalent to employer-selected outplacement services and choose The Briefcase Coach as your preferred provider. The Briefcase Coach is considered the top executive resume writing firm for experienced executives. We are a boutique firm, which means we limit the number of clients we work with at a time to truly offer exceptional white-glove service.
When job seekers hire us, they are not given video modules to watch at their own pace. Instead, they get to work one-on-one with veteran HR, and career thought leader Sarah Johnston, who has amassed a following of over 1 million people. She will work with you to ensure that all of your career marketing collateral position you as a top contender for your next executive role.