Laid off - question about severance package
February 21, 2017 8:29 AM   Subscribe

I'm getting laid off at the end of the month. My company is pushing me to transfer internally but I don't want any of the jobs listed on the intranet. They have said they'd discuss some kind of severance package if I can't transfer. Will it hurt to say "no, I don't want to"? If I had some outside job lined up (I don't), could that affect my severance package or do they legally have to give it to me regardless of whether I'm working or laying on the beach?

I've never done this before. I've only ever quit or been fired (once when I was 18).

The convo I'd like to have with HR goes like this

Them: So we have position X or Y that we think we will fit you
Me: No thanks, I'm good
Them: Oh, you found something else?
Me: No, I'm going to sell everything and buy a sailboat
Them: OK here is your severance package, best of luck

Is that what happens? Is the package negotiable? Is there anything I should or shouldn't say? I've been there six years and I'm a project manager. I have excellent performance reviews.
posted by AFABulous to Work & Money (15 answers total)
Your severance package and your future plans are unrelated.
posted by Dolley at 8:36 AM on February 21, 2017 [2 favorites]

Response by poster: In case it's relevant, I live in Wisconsin.
posted by AFABulous at 8:37 AM on February 21, 2017

Wisconsin, like most US states, follows at-will employment. Unless you have some kind of contract or union agreement that entitles you to severance, it is purely discretionary and they can legally withhold it for pretty much any reason, or no reason at all.

So maybe the way to approach this situation is by asking something like: "What can you tell me about the severance package, and are there any restrictions or conditions associated with it?" Then you'll have a better idea of whether negotiation is possible.
posted by teraflop at 8:47 AM on February 21, 2017 [8 favorites]

Unless there is a non-compete, your current company has no need to know what you are doing the day after you leave the firm.

I think the operable word in your question is "can't". Is it a won't transfer or can't transfer? I have seen a situation at a firm I briefly worked for whereby the person was offered a parallel transfer, no change in title or compensation and the person said no and was then let go with no severance. THe firm argued that the person had effectively quit by not accepting the transfer. Severance packages are negotiable on the margin, but I have never seen any material change. There is generally some sort of objective formula like 1 month pay for every year you have been there with a max of 12 months type of thing. I have seen bonuses negotiated towards the end of the fiscal year but that was at a Wall Street firm where the bonus was tied to specific production.
posted by AugustWest at 8:50 AM on February 21, 2017 [2 favorites]

It really might be worth consulting an employment lawyer before you turn down the equivalent positions. -- echoing that this could mean no or little severance.
posted by warriorqueen at 9:16 AM on February 21, 2017 [1 favorite]

Response by poster: There is generally some sort of objective formula like 1 month pay for every year you have been there with a max of 12 months type of thing.

Is this a legal thing??
posted by AFABulous at 9:17 AM on February 21, 2017

Response by poster: Also, can they really say "move across the country or forfeit your severance"?
posted by AFABulous at 9:18 AM on February 21, 2017

No, there is no legal standard for severance unless it has been otherwise negotiated between the parties. In fact, you have zero legal entitlement to any severance at all. They could let you go tomorrow and give you nothing.

That's the legal backdrop. As a practical matter, your post-work plans (barring a noncompete) shouldn't matter, but it is indeed possible that if you turn down a transfer they might choose to treat you as quitting rather than being laid off and give you nothing. It's a matter of industry and company practice, which is hard for outsiders to know.
posted by praemunire at 9:23 AM on February 21, 2017 [5 favorites]

here is generally some sort of objective formula like 1 month pay for every year you have been there with a max of 12 months type of thing.

I went through a layoff in Ontario, where this is sort-of quasi-standard - the Employment Act requires a smaller amount and then the courts have historically awarded something around 3-4 weeks per year of service so a kind of...negotiable standard has resulted. But it's not anything like a guarantee unless you have a contract that guarantees it.

However, that is nothing like an at-will state which is why I really suggest pro advice.
posted by warriorqueen at 9:30 AM on February 21, 2017

Another thing to consider in your communications/negotiation with them is the effect it could have on collecting unemployment. Some companies contest the claims and some do not.
posted by Stewriffic at 9:35 AM on February 21, 2017 [1 favorite]

In most states, if they don't offer you two weeks' pay the state employment commission can get shirty with them on your behalf, but there no real aegis on them (with the exception of some industries that are beholden to federal or other regulatory guidelines, or if you're in a union, or if you negotiated severance as part of your employment agreement, which is how CEOs can get fired from a company and get giant severance payouts) aside from maybe some interest in goodwill or if they want something from you before they go.

They have no interest (or reason) to show their hand before they see what you're going to do, and they don't have any reason to give you any more than they absolutely have to. Unless you have something to play hardball with, you don't have much power here.

I know people who have gotten those "month per year" or whatever severances, but there was always either guilt (on behalf of someone with enough power that it matters) or strings (like "we're giving you 12 months severance pay, which is cut off if you get another job in the industry"), or it was a high enough position that not doing so would hurt their ability to recruit at that level in the future because word gets around.

In most states, "we offered them a comparable job in Bimblemuck, Wyoming but they declined" is enough to refuse severance, or anything more than two weeks, and in some states that's even grounds to deny unemployment. Your state employment commission should have all those rules somewhere on their website.
posted by Lyn Never at 10:22 AM on February 21, 2017

Companies are under no obligation whatsoever to offer you a severance, but many do because they can get you to agree to not say negative things about them in the future and keep you "happy." You should get a lawyer to read the contract to make sure there isn't a sneaky non-compete or something weird, but there almost never is. The packages are almost never continent on your future employment whatsoever.

* That conversation has happened to me twice in my career, and it was almost that verbatim.

Take the severance (assuming the contract is okay). It may be weeks/months before you find a new gig, and it will alleviate the pressure to find something that isn't a good fit.
posted by General Malaise at 11:06 AM on February 21, 2017

Oh, and they're kind of negotiable, because, well, everything is negotiable, but really they're not so much, because you have almost no leverage.
posted by General Malaise at 11:08 AM on February 21, 2017

Severance packages are there to help their appearance as a good corporate citizen and in some cases to generally help the people that helped them.

They are also an instrument used to lubricate waivers of liability and agreements to not litigate. The thinking goes that if they can pay you some money and look like a good guy while doing it, they can also get you to sign away any legal cause or opportunity you might have had as a result of them slightly wronging you.

An important element to this dynamic is the size and type of company:
-Large, public companies are about as risk-averse as any rational actor can be. If this is what you are dealing with, I would bet that they made an announcement at some point that laid out the severance plan. That plan is pretty much gospel. In this case, you could probably slap HR right in the face and would still get whatever the corporate leadership said you would get.
-Smaller, private companies are far less risk-averse and are more likely to wheel and deal with you in some capacity. Still, your plan and their strategy with regard to offering you severance are very likely not related.

If I am you:
-"Thank you for offering the option of a severance package. Can we talk through what that might look like? Is there a policy?"
Then, post that conversation...
-"Thank you also for looking in to these transition opportunities for me, I appreciate that! Still, I don't see anything yet that fits where I am trying to go with my next position. What kind of process is there around official notification of Loss-of-Work?"
posted by milqman at 11:31 AM on February 21, 2017 [1 favorite]

They are not required to offer you severance. However, if they do, they are unlikely to let you have it if you turn down the transfer to another job in the company. Therefore, your conversation is more likely to go like this:

Them: So we have position X or Y that we think we will fit you
Me: No thanks, I'm good
Them: That's too bad. We can't offer you severance if there's an opening you're qualified for but unwilling to take. So, when is your last day?
posted by ImproviseOrDie at 11:47 AM on February 21, 2017 [2 favorites]

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