TRACEY’S PRACTICAL EMPLOYMENT TIP
OF THE MONTH*

DECEMBER 2007: WHAT CONSTITUTES REASONABLE SEVERANCE?

It is hard to believe that the Holiday season is upon us again. And, despite most people’s belief regarding job security, the period between Thanksgiving and New Year’s Eve is one of the more tenuous times for those who work for a living. Indeed, lay-offs are quite common this time of year. For me, this means I will be repeatedly answering the one question that is most important to my clients when they meet with me to go over their severance paperwork: What constitutes reasonable severance?

I wish there was an easy answer to this question. However, there is no magic formula that dictates what amount of severance you may ultimately receive if you are willing to negotiate fore more. In evaluating whether the offered severance is reasonable (or fair) and how much more you might ask for I initially consider the standards that most professionals look to: one to two weeks for assistants, two to three weeks for mid-level managers and vice presidents, three to four weeks for senior vice presidents and four weeks or more per year for chiefs. However, these standards are nothing more than a starting point. In my experience the amount of severance one can obtain is highly negotiable and will depend in large part on a variety of factors such as the financial size and benefit policies of the employer, your individual needs, the reason for your termination (i.e., were you terminated in violation of a contract or due to discrimination), the obligations you are being asked to assume (i.e., non-compete, future cooperation), the length of your tenure, and your individual needs (i.e., serious health issues). It may also be as simple as the fact that you are well liked by the person(s) making the decision.

I would also caution you not to compare your offer to what you have “heard” others have received. First, it is rare that what you “heard” someone got turns out to be accurate. Second, most employers are turned off by a request that is based on what you heard others got. Third, everyone, including you, has unique circumstances and it is your unique circumstances that will dictate what you get over and above the initial offer.

In the end, the key to maximizing what your severance is to simply ask for more because you get nothing in this life if you do not ask. Just remember that, as discussed in my September 2007 Monthly Tip, when asking make sure you do so in a respectful and reasonable manner.

Next Month’s Tip: CONFIDENTIALITY @ WORK: JUST BECAUSE YOU BUILT IT DOESN’T MEAN IT'S YOURS

Monthly Tip Archive

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* Disclaimer: The contents of this page are for informational purposes only and nothing herein is intended to constitute legal advice nor should anything contained herein be taken or relied on as such. Each individual executive and employee has a unique set of facts and circumstances that the general discussion set forth above may be wholly inapplicable to. Only through consultation with a lawyer from our firm in which all of the facts and circumstances of an individual’s unique situation are explored and considered can a true legal assessment of your rights and remedies be ascertained. Any use of this information is taken solely at your own risk.