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What’s In Your Severance Negotiation Plan When the Recession Hits?

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By Mark Carey

Ugg, the sky is falling, the sky is falling- the recession is coming.   That’s the familiar beat from the media about the current or future recession.   When that recession wave begins to batter your employment status, do you have a plan to bail yourself out of the mess? Specifically, are you planning on receiving severance benefits via a company sponsored severance plan or are you going to build a case against your employer challenging the reason(s) for the termination and attempt to negotiate a settlement?

Two Forms of Severance Benefits

For all practical purposes, there are two ways to receive severance benefits from your employer.  The first type of severance benefit is through the company sponsored severance plan.  Check your HR portal to see if you have one. If that does not work, check to see if your employer filed a severance plan with the U.S. Dept. of Labor.  You are looking for a plan entitled “severance” or “layoff benefits” and the plan number will always be 509 with a plan type of 4I Severance Pay.  All public and private companies that maintain severance plans, must file a Form 5500 with the U.S. Dept. of Labor.  Once you confirm the existence of the plan, ask your HR Dept. for a copy of the plan document. They have to provide it to you in response to your written request for it.  If they do not provide a copy of the plan document, that is a violation of ERISA, a federal law covering severance benefits.

Severance Plan Benefits

Severance benefits under a plan are the floor for severance benefits.  If you investigate your own facts and determine there exists any form of discrimination or retaliation, you can negotiate for more money (severance pay) on top of the existing severance plan benefits.  The legal claims must be substantiated with a sworn affidavit, otherwise no employment attorney working for the company will take you seriously. 

You are not required to tell the employer you have an employment lawyer. I actually suggest you don’t and keep the company wondering, while at the same time you continue to negotiate directly with the company. You can hint you have an employment attorney in the background, but make sure you do your homework regarding your claims. Any employment attorney working for the company will be able to spot whether or not you have an employment attorney by the contents of your internal communications, your agency complaints filed with the EEOC and state agency. Even if you do have an employment attorney, you may want to keep the attorney hidden until the right time to bring this representation to the forefront of your negotiation.  I have worked deals both as the client’s spokesperson and from behind the scenes; more often from behind the scenes.

The second method, as hinted above, is to develop legal claims to assert against your employer.  You can share your legal claims and demand for more severance with your employer/former employer for negotiation purposes.  You can also file administrative complaints with the EEOC and your state fair employment practices agency.  Neither of these filings is public, even though the complaints are filed with governmental agencies.  It is not until you file suit in court, does your name became public on the internet.

Negotiate Only Through Email

The negotiation with the employer should be done via email if you are not represented by an attorney. The email communication will avoid the most lethal weapon the employer uses- an examination of your present state of psychology.  What do I mean?  I advise clients not to interact directly with their supervisors, executives or human resource department personnel because employers are looking for hints to your level of insecurity, emotions, and merits of your claims.  Any zoom meeting or telephone call will show if you are sweating the negotiation or just uneasy.  Employers who discover your weaknesses will exploit them as a matter of routine practice and attempt to bargain like a rock.  They will not give you what you want in the end.  I even recently did an entire severance negotiation via email against an employer who was owned by a billionaire.  I never spoke to the company’s attorneys throughout the negotiation process and they were not pleased.  But that was the point. I wanted to appear that I was not approachable and unwavering in terms of my demands, while I filed a volley of administrative complaints in two different federal offices and with state and local fair employment practice agencies.  This process drove the employer mad and facilitated the successful outcome of the case.

If you hit a wall with your severance negotiation, try this tactic.  In a professional yet respectful tone, appear unwavering in your email correspondence. Tell them you will file administrative complaints and lawsuits if you do not get your way.  Then stay true to your word and file your administrative complaints.  Never falter when you make threats to initiate litigation.  Most employers will back away and attempt to reach a settlement these days. 

I will warn you that most employers who discover you do not have an attorney will not bargain fairly with you.  You typically know this is happening when the employer refuses to negotiate at all.   At this point, you have no choice but to hire an employment lawyer to help you, but again the attorney does not have to be in the front facing part of the negotiation.  

“If you fail to plan, you are planning to fail.” Benjamin Franklin.  So, get a plan and go kick some ass in your severance negotiation.

See previous articles we have written about severance benefits HERE and HERE.

If you would like more information about building a severance negotiation plan, please contact Carey & Associates, P.C. at

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