You’ve been offered a Severance Package. Should you take it?

by Fred Abramson on August 4, 2010 · 0 comments

It’s 5:00 on Friday and your boss calls you into her office.  You probably noticed that business has not been going well.  A long time customer has left and there is simply not enough work to go around.  Your boss, tearing a bit, breaks the news and offers you a severance package. Should you take it?

Believe it our not, you can negotiate a severance agreement.

  1. Understand that your emotions while be on high after you are initially handed the agreement.  The worst thing that you can do is let your boss “have it.” Be cordial and ask for time to review the agreement.  You have the legal right to do so.
  2. Don’t sign anything immediately. Your boss may ask you sign a waiver, which could release any future rights that you may have in the event of a potential lawsuit. So if you a fired while you are pregnant, waive your discrimination case goodbye.
  3. Be aware that your employer cannot withhold your wages if you fail to sign the agreement.
  4. Have you been paid all over your benefits? Review your employee handbook or employment contract to see if you are owed any vacation time.
  5. How is the severance payment being disbursed? In a lump sum or over a period of time.  There could be tax benefits for choosing one form of payment over another.
  6. What health insurance is being offered?  Look into possible of extension of your Cobra benefits.
  7. Your employer may want you to sign a non-compete agreement or non-disclosure agreement.  If you sign a non-compete agreement, you may have trouble seeking new employment if the terms are not analyzed.  A non-disclosure agreement may prohibit you from disclosing trade secrets to a potential new employer.
  8. Do you have any stock options?
  9. In some cases, your employee handbook or agreement may provide that your employer will pay your legal expenses for an attorney review your severance package.
  10. You can negotiate with your employer and agree to the language of your recommendation.

Don’t negotiate your severance agreement alone. The Law Office of Frederic R. Abramson reviews, drafts and negotiates severance agreements.  Call me at 212-233-0666 for a free consultation.

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