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Severance Package

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  • Apr 19th, 2017 3:21 pm
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[OP]
Newbie
Aug 19, 2012
43 posts
3 upvotes

Severance Package

Are there any good threads here to answer questions about severance packages? Is there anyone here who has experience negotiating a severance package? Thanks.
11 replies
Deal Guru
Dec 31, 2005
13037 posts
612 upvotes
Talk to a lawyer.

There are many factors that go into severance. At first I thought my severance was low, but lawyer confirmed it was lump sum with ni conditions...the alternate was a severance that was 10-15 percent higher but paid monthly and stopped when I found a job.
Lots to consider.
[OP]
Newbie
Aug 19, 2012
43 posts
3 upvotes
nalababe wrote:
Apr 8th, 2017 11:24 am
Talk to a lawyer.

There are many factors that go into severance. At first I thought my severance was low, but lawyer confirmed it was lump sum with ni conditions...the alternate was a severance that was 10-15 percent higher but paid monthly and stopped when I found a job.
Lots to consider.
nalababe,

Thanks for the reply. I have already retained a lawyer, but I am unsure how to proceed.

I was employed with the company for 12 years and they offered 7 months paid monthly with no clawback. We have countered with 13 months lump sum (based on the 1 month per year of service rule of thumb, age, availability of work, etc.) and they countered back with 8 months paid monthly.

My lawyer recommends we counter back with 9 or 10 months paid monthly. My issue is my employer's counter said "final offer" but my lawyer thinks it is a bluff and they will continue to negotiate to avoid court. I want to counter one more time, but l don't want to lose the offer and go to court.

How many counter offers are normal in severance negotiations? How likely is it that my employer will stop negotiations after one counter?
Last edited by thegoalie31 on Apr 8th, 2017 12:10 pm, edited 1 time in total.
Member
Oct 4, 2008
231 posts
14 upvotes
thegoalie31 wrote:
Apr 8th, 2017 12:10 pm
nalababe,

Thanks for the reply. I have already retained a lawyer, but I am unsure how to proceed.

I was employed with the company for 12 years and they offered 7 months paid monthly with no clawback. We have countered with 13 months lump sum (based on the 1 month per year of service rule of thumb, age, availability of work, etc.) and they countered back with 8 months paid monthly.

My lawyer recommends we counter back with 9 or 10 months paid monthly. My issue is my employer's counter said "final offer" but my lawyer thinks it is a bluff and they will continue to negotiate to avoid court. I want to counter one more time, but l don't want to lose the offer and go to court.

How many counter offers is normal in severance negotiations? How likely is it that my employer will stop negotiations after one counter?
depends on employment conditions, are they closing shop? or are they just closing your department, if they are closing shop, take whatever you can. also depends on your employment contract.

they probably probably prefer not going to court just as much as you. Stopping negotiations is never a smart idea as it does not go well in courts, if they have proper legal advice, they probably wont stop negotiating.
[OP]
Newbie
Aug 19, 2012
43 posts
3 upvotes
cmhyt wrote:
Apr 8th, 2017 12:33 pm
depends on employment conditions, are they closing shop? or are they just closing your department, if they are closing shop, take whatever you can. also depends on your employment contract.

they probably probably prefer not going to court just as much as you. Stopping negotiations is never a smart idea as it does not go well in courts, if they have proper legal advice, they probably wont stop negotiating.
cmhyt,

Thanks for the reply. They are a large company restructuring the department. Given my 12 year tenure l believe there is still room to negotiate. I don't believe they are currently consulting with legal - just senior management making decisions. I trust my lawyer, but I'm just curious for some other opinions before l make a decision.
Newbie
Mar 5, 2017
9 posts
Will the lawyer go on contingency? If yes, I'd counter the offer because worse comes to worse, you can request legal fees to be included should you end up in court. Kind of like, "They wasted everyone's time. They should pay for my lawyer's legal fees as well as the full sum." Maybe that's a different approach you could consider?
Deal Guru
Dec 31, 2005
13037 posts
612 upvotes
The one month idea isn't anything if substance. When the lawyer did a search of comparable decisions for like role, Age, seniority.... what was udentified.

When we looked at historical awards the offer we had been given was pretty close...and it wasn't 1 month per year.

As far as legal fees, you can ask (we did) it was rejected.
Deal Addict
Oct 18, 2004
3000 posts
268 upvotes
3 weeks for every year is more the norm, no? Which in your case would be 8.3 months.
[OP]
Newbie
Aug 19, 2012
43 posts
3 upvotes
nalababe wrote:
Apr 9th, 2017 4:03 pm
The one month idea isn't anything if substance. When the lawyer did a search of comparable decisions for like role, Age, seniority.... what was udentified.

When we looked at historical awards the offer we had been given was pretty close...and it wasn't 1 month per year.

As far as legal fees, you can ask (we did) it was rejected.
Based on my situation, my lawyer said similar cases have been awarded 13-14 months in court. 8-9 months is the low end and 10 months should be the minimum out of court settlement.

At this point, I'm thinking of one last counter at 10 months. I agree with the post above that a large company will likely want to play ball and avoid court as long as the ask is reasonable.

We are not asking for legal fees at this point unless it goes to court, in which case we will request full reimbursement of fees in the lawsuit.
Penalty Box
Oct 13, 2016
142 posts
7 upvotes
What kind of negotiation are you referring to?

I did once three years ago. Basically, it is larger scale layoff, where my package is slightly worse than some local employee. I just threatened to look for a lawyer, they just revised my package to be the same as others.

If you feel that you were discriminated in the package by race/country of birth and gender, it is fairly easy and sometimes no need to hire a lawyer.

If others, suggest you to hire a lawyer. But reasonable lawyer usually ask for a profit sharing type of contract. You don't need to pay any upfront fee. You need to sign non-disclosure and non-competing clause in the agreement though.




]
thegoalie31 wrote:
Apr 6th, 2017 10:11 pm
Are there any good threads here to answer questions about severance packages? Is there anyone here who has experience negotiating a severance package? Thanks.
Sr. Member
Apr 21, 2014
861 posts
168 upvotes
Alberta
nalababe wrote:
Apr 9th, 2017 4:03 pm
The one month idea isn't anything if substance. When the lawyer did a search of comparable decisions for like role, Age, seniority.... what was udentified.

When we looked at historical awards the offer we had been given was pretty close...and it wasn't 1 month per year.

As far as legal fees, you can ask (we did) it was rejected.
I was with a public company and worked there for 4 year and 11 months, when the price Of gold tanked and regional office was closed. I was 32 at the time, and they initially offered 12 weeks, went with a demand letter from an employment lawyer and they upped the offer to 16 weeks and payed up to 2k for my legal fees (legal fees were less than that, so didn't pay a cent). Both offered were without any payback if I got another job, but as mentioned it is within their right to do so. Which worked out well because I ended up finding a job making 23k more during the negotiation process and started 9 days after my last day.

I had bad luck with that employer, as they were taken over a short time after I started with them and was let go 8 months later (a few people layed off almost every week!). I guess they didn't want any lawsuits because they offered 9 weeks severance even though I was only there for 8 months. Again with no conditions.

My lawyer charged hourly. Think the total bill was $1700 or something like that.
Member
User avatar
Aug 30, 2012
267 posts
73 upvotes
Montreal
out of curiosity, where did you work that the regional office was closed when Au tanked?
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