Explain Severance Negotiation as if to a 5 y/o

January 17, 2013 7:00 AM

I was just laid off this week. Am still reeling from the shock, crying at odd moments, cycling through grief, despair, relief, hurt. Though many people from the company were let go I was the only person from my department and relatively low level, so it feels quite personal, as if the big layoffs were just an excuse to get rid of me. I will eventually have to come to grips with whether I want to remain in my industry or not but that seems like a decision best delayed to a time when I am calmer.

On to the meat of the question. As part of my severance package I was offered about 3 months of continued pay and health insurance. I am usually the type to meekly accept whatever I am given. I have only occasionally negotiated small increases in salary.

Right now the 3 months seems quite generous but I have no idea how long it will take me to find another job, particularly if I decide to leave the industry. Due to my history of cancer I am deeply concerned about the possibly of being without health insurance or of having to pay for insurance out of pocket and COBRA is insanely expensive. I have a small, sad savings account good for about 4 months rent.

I am thinking it might be prudent to at least attempt to negotiate something better. I am a lousy negotiator. I am timid and nervous. Deep down I don't believe I deserve a damn thing (in general). So considering all of this:

What is a reasonable ask? Two additional months of health insurance and salary? One? Five?
How do these talks go? Do ppl overshoot?
What are things I should watch out for?
Is there any language in my severance letter I should be particularly alert to?
I thought of talking to an employment lawyer but then I read online that once a lawyer gets involved your negotiation goes from HR to the corporate legal dept, and your chances get worse.
Should I just take the money and run? Do I have anything to lose by trying?
What can I do to increase my chances?

(I am in the U.S. I have been making under 80K/year)

posted by anonymous to work & money (18 answers total)

One thing I would look into is whether and how this affects your eligibility for unemployment benefits, as well as what those benefits are/would be.
posted by J. Wilson at 7:02 AM on January 17

I can't advise you on COBRA or negotiation, but I just wanted to pop in and say that I had the same experience. I was laid off from my first job out of college (along with one other person), I was one of the most junior people and I took it very personally. And I'm here to tell you - don't. I know it feels horrible but it's not personal, it happens all the time. It turned out to be one of the best things that ever happened to me as it took my life in a very new and kind of radical direction (I got an opportunity to move abroad for many years and start over in a better career in the same industry and move up the ladder relatively quickly). When I moved back, I was networking with people in my industry and got in touch with the person at that company who hired me and laid me off.....and she tried to get me back into the company! So don't let it get you down. In a year from now, it won't matter. I also got three months pay for my severance package and I took it.
posted by young sister beacon at 7:08 AM on January 17 [3 favorites]

Three months does not strike me as being a stingy offer by your former employer, but often such things are related to how long you worked for them, which is information you haven't provided. Also to note, I presume it's possible they are under no legal obligation to give you severance pay unless it's stipulated in their company employee manual and/or is standard practice at the company and/or was mentioned in an employment contract with you.
posted by Dansaman at 7:09 AM on January 17 [1 favorite]

Three months of pay and benefits sounds fairly generous (I'm assuming there is no contract that would exceed this).

You might also consider that offering you additional benefits may obligate them to offer others that were laid off the same benefit.

personally, I would take the money and run and start looking for a new job.
posted by HuronBob at 7:10 AM on January 17 [4 favorites]

This is an outrageously great offer. They don't have to offer anything in a severance package.

You may not be eligible for unemployment until after the 3 months have passed, but you should go down there with your separation letter and get in the system anyway.

Also, DO NOT TAKE IT PERSONALLY! It's not personal.

Dust off your resume and think about all the great jobs that are out there for you! Work your network, change your LinkedIn status and start haunting Simply Hired.

Your attitude about this is what will make the difference. Everyone gets laid off, it happens. I've been laid off twice in the past 4 years. No biggie.

Don't over think this. Take the offer, take the money, take the insurance and RUN!
posted by Ruthless Bunny at 7:11 AM on January 17 [12 favorites]

I have absolutely had people ask for more severance and no matter what company I have worked for the answer was always no*. They really have no reason to give you more money. Can you ask? Sure, but unless you can give them a compelling reason to give you more they aren't going to.

That said, 3 months is pretty damn nice. The last place I worked did one week per year of service, capped at 6 weeks. The place before that was a flat 6 weeks for everyone. 12 weeks? Downright awesome. Especially if they are also paying for COBRA. Take that offer.

*One exception and that was because this person was going to sue us for commissions they thought they were owed but really weren't, their lawyer got involved, giving them an extra $1500 was cheaper than fighting it.
posted by magnetsphere at 7:13 AM on January 17 [1 favorite]

Unless it's contractually obligated, they don't have to give you anything in severance. And, honestly, what possible reason could your company have to want to give you more than they're giving you now? Negotiations have to be based on the idea that you have something they want or need. What would they want or need from you, a severed employee?

It's generous (as long as it doesn't include a non-compete). Take it.
posted by inturnaround at 7:14 AM on January 17

Nth'ing "take the money and run." Negotiation is great when you have any power. Unless the company fears litigation over laying you off, you have none, and you can end up damaging your relationship with people still at the company (or, as HuronBob points out, people who got laid off as well).

Go to your local unemployment office, today, and polish up the resume. Your old job is done. Let it die.
posted by Etrigan at 7:15 AM on January 17 [1 favorite]

Just agreeing that you have a pretty good/standard deal, especially for a low level employee. This is not really a negotiating situation unless you have some leverage you haven't mentioned. Take the money and focus on networking/the job search. Not to make it seem worse but since benefits usually take at least a month to kick in at a new job, ideally you want to find something within two months so you don't have to start with COBRA payments.
posted by mikepop at 7:41 AM on January 17

The only negotiation power you have is to give back some of the money they've offered you in trade for some additional benefit, but for the most part your continued benefits are tied to the duration for which you will be paid salary. Unless you've got something on them, but that's a delicate line between severance and extortion. Otherwise, what is your leverage? You'll...leave harder?

I've never gotten more than two weeks, so it seems like a pretty sweet deal.

This is probably not the last time you will be laid off. It stings and it's sometimes a shock. Give yourself three days to have your feelings hurt, and then shake it off and remind yourself that it isn't personal - they don't give a shit about you either way. They certainly don't care how long it may take you to find a new job.

File unemployment (hopefully you live in a state with modern conveniences like phone and internet and do not have to physically go to an employment office) even though it won't pay you anything until your pay runs out. If something should happen, like your former employer suddenly reneges on the deal, the employment commission is there to help you.

Best case scenario: you get a new job well before the money runs out and you can pad that savings account a little for the next time.
posted by Lyn Never at 7:43 AM on January 17

I'm going to disagree with the above - yes, it sounds like a good offer, but I believe in asking for more than initially offered under basically all circumstances. Not in an angry demanding way, but just lay out your reasoning and ask politely.

Unlike magnetsphere, my experience has been that whenever someone asks for more severance, they almost always get an extra week at least.

Seriously, the worst that could reasonably happen is that they might say no. I've never heard of any company rescinding a severance offer just because the former employee asked for more! (No guarantee, obvs.) If you ask politely, it won't damage your relationship with people still at the company even if they say no (unless they're batshit, in which case they weren't going to be good contacts in the future anyway).

Don't take it personally. If you behave courteously, they won't take you looking out for yourself personally, either. That's how professionals do business.

Incidentally, the reason 3 months sounds high to most of us is that we're used to hearing something more along the lines of 1 week severance per year you worked there.

inturnaround wrote: "Negotiations have to be based on the idea that you have something they want or need. What would they want or need from you, a severed employee?"

If you read your severance agreement, you'll see the answer to that. In exchange for the money they're offering you, I bet they want you to waive any and all claims you may have against them, absolve them of all liability, never sue them, never speak poorly about them to others even in casual conversation, keep your mouth shut about various things, and possibly avoid competing with them in the future.

In fact, I kind of wonder if the severance offer is so high because they think you might have some sort of discrimination claim against them or something that they want you to sign away your rights to. Did something happen that you're not telling us? If so, don't tell us here, just go speak to a lawyer before signing anything!

Disclaimer: This is not legal advice. I am not your lawyer. You should go over the agreement with your own lawyer before signing.
posted by 168 at 7:48 AM on January 17

On a completely different note, look for any language about non-compete, non-disclosure, non-disparagement, etc. agreements. There is an excellent chance you are SOL regarding those, but you want to know whether they're there. (And whether enforceable.)
posted by dekathelon at 8:08 AM on January 17 [1 favorite]

I write and negotiate severance agreements for my employer. My advice would be to seek out the company's Involuntary Separation Policy (or Severance Policy, it may be called) and compare your offer to what the policy provides for to make sure you are getting treated properly. The policy should be freely available to you from your HR people.

I don't know your years of service or your position, but a fairly standard package is 2 weeks/year of service for exempt employees. So 12 weeks would be equivalent to 6 years at your job. If you've been there longer, it's not to say you'll get it but you can ask with confidence for 2 weeks/year. As for COBRA, for all but our highest managerial employees we give 1 month subsidized COBRA and the rest is at the employees' expense. So 3 months is pretty good.

And know that if they are offering you severance, it is not personal. It's one of the disappointments of my job that loyalty between employer and employee is largely a matter of convenience these days, and is disregarded by both sides far too quickly. That they are offering a package (and what appears to be a decent one) demonstrates that this is on them and not on you.
posted by AgentRocket at 8:20 AM on January 17 [1 favorite]

Your layoff and severance offer are so strikingly similar to that of a friend (and fellow MeFite) who was laid off this week that I just sent that person an email to see if you were them. You are not them, but that person told me that two weeks severance per year of service is some people's idea of standard-- I see AgentRocket has said the same.

I was laid off 4 years ago-- I know what you're going through, and my best advice to you is also found above: in the here and now, you need to tell the people you know, and the people that know you, that you're laid off and in need of employment. Your network can find more more jobs than you alone. Don't be embarrassed; they didn't lay you off because of who you are, and it's not a sign that your work skills aren't valuable.

Don't only rely on COBRA. I had the fortune to get a subsidy for COBRA from the stimulus outlay at the time, but I was also exploring other health care options and found that the cost would be comparable to the 35% of COBRA I was paying ($200-250/month at the time). It's more important in the short term to stay covered than it is to have great coverage at this stage-- that was at least true before Obamacare/ACA.

Explore your unemployment options. No matter what work you pick up, stay in their system (even not getting paid if you get temp employment) until you are fully employed. In my state, unemployment doesn't pay out for the first week, so see if yours does the same and be prepared. Do what it takes to organize yourself and keep good records of your employment-seeking activities and any other requirements for unemployment-- they audit people all the time; my cousin got audited the first week!

I'm not recommending you steal office supplies, mind you. :^) Good luck.
posted by Sunburnt at 9:00 AM on January 17 [2 favorites]

YMMV and these situations generally don't apply to the "low-level" employee status you've given yourself, but look into any non-compete agreements you may have signed when you started. My current company tried to get me to sign one that had ridiculously broad language that basically preserved its terms under any kind of termination. Most people sign those things without reading them carefully.
posted by mkultra at 10:18 AM on January 17

Do not assume that you are not eligible for unemployment while you are still receiving severance - check with your state unemployment office first. I _was_ eligible, I seem to recall that it had something to do with the fact that I had to waive rights to receive the severance. (this was in MA in 2010).
posted by mr vino at 10:43 AM on January 17

Negotiate? No, no, no. Take it or leave it. No special snowflake stuff here. Really. It's just the way of the world. Let it go, move on.

I was laid off 4 times in a 5 year period in the early 1990s when I had a young family. It truly wasn't personal, not one of them. I ended up back where I started and have worked there for 15 years since. In fact, I didn't call them, they called me.
posted by Doohickie at 11:18 AM on January 17

I was just laid off this week. Am still reeling from the shock, crying at odd moments, cycling through grief, despair, relief, hurt. Though many people from the company were let go I was the only person from my department and relatively low level, so it feels quite personal, as if the big layoffs were just an excuse to get rid of me.

Three months' severance for a low-level employee is pretty good, actually, so take that and run...but as for the grief, that's totally normal, and I've been witness to a significant number of layoffs, so I can tell you these truths:

1. This wasn't about you personally;
2. In every layoff, there are more than a few people that everyone wishes weren't laid off because they were awesome and terrific;
3. You will have to grieve your layoff, which takes time, and looking for a new job is a great way to stay busy during the grieving process.
posted by davejay at 4:00 PM on January 17 [1 favorite]