Friday, April 15, 2011

How To Negotiate Severance

Susan Adams

The other day a friend called and asked if I’d written anything about negotiating the best possible deal with your employer when you lose your job. A friend of hers feared she was about to be laid off and wanted to prepare.

Preparing for such a thing is a good idea, say career coaches and lawyers who advise workers on how to handle a termination. The emotional shock of a layoff can be devastating, so it’s helpful to try to make a game plan in advance.

Though public sector layoffs are headlining the news these days, and the private sector has backed off of mass layoffs since the bottom of the recession, companies are still shedding workers, coaches say, though the firings tend to come one or a few at a time. The Bureau of Labor Statistics bears that out.

According to Bureau data, the number of people who lost their jobs in layoffs of more than 50 workers at a time fell in 2010 to 1.2 million, versus 2.1 million in 2009. The BLS hasn’t yet released numbers for the first quarter of this year, but coaches say the trend continues. Companies are still shutting down whole departments.  For instance, Cisco just announced that it will shutter its Flip camera business and reduce its workforce by 550. (My colleague Quentin Hardy wrote about the news here.)

Coaches say that workers who lose their jobs as part of group layoffs have a tougher time negotiating a better severance package. But it’s worth trying, especially if you’ve logged a number of years at your company and formed strong relationships.

The two most important pieces of advice offered by employment professionals:  Take some time to digest your company’s severance offer, and do negotiate for a better deal before you sign anything. Employment lawyer Wendi Lazar, a partner at Outten & Goulden, notes that companies routinely ask departing workers to sign a document that waives almost all rights to sue under any federal discrimination statutes and state or local laws. At the same time, your employers might present you with an onerous non-compete agreements. Lazar says it’s wise not to sign before you consult with a professional, be it a lawyer or a coach, especially when it comes to non-competes. Those agreements deserve a separate article, but suffice it to say that the law requires employers to offer quite a bit of severance if they expect workers not to compete for an extended period.

Under the federal age discrimination law, Lazar adds, workers who are over 40 have the right to take 21 days to review a severance agreement. Lazar says this 21-day period has become routine in most companies for workers of all ages.

As for negotiating, coaches encourage you to ask for as much as you can get, starting with a larger severance payout. One job search professional, who doesn’t want to be quoted, emphasizes that most employers feel terribly guilty when they let a longtime worker go. “You play on their guilt,” he advises. “That’s how this game works.” This longtime job pro has seen departing workers double their severance, from four months to eight, and negotiate perks like keeping a company computer and BlackBerry, continued use of the office and payment for job coaching.

Read The Rest Of The Forbes Article For More Advice

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