“Can I request severance or a cash settlement to keep quiet about an illegal practice by my employer?”

Question: I have been asked to keep quiet regarding my employer’s knowingly overcharging a customer on a contract price component while my company pockets the extra profit.

I am ready to resign but want to settle regarding keeping this quiet in exchange for a cash settlement. Can this be done?    

Camas, Washington

Answer: Dear Dean: I am glad you wrote in. If you try to do what you seem to be considering doing, you could possibly go to prison for a long time for committing a very serious crime: extortion.                

1. It is a serious crime – extortion – to say, in one way or another, “I will tell people something about you unless you pay me money.” Or, “I won’t tell people something about you unless you give me money.” And, in the law, it doesn’t make a difference whether what you are threatening to tell people is true or false. In fact, it is often the true things that people do that they are most frightened will become public knowledge.   

2. Extortion is just like armed robbery, but without being armed with a weapon. Most states define extortion as the gaining of property or money by almost any kind of threat, including threat of violence (“I will break your leg if you don’t give me $1,000.”), unfavorable government action (“I won’t approve your zoning application unless you give me sexual favors.”), or harm to reputation (“Unless you give me $100, I will tell people you are a child molester.”)

If, however, you have a gun in your hand when you say these words, and thus make the other person feel a threat of imminent physical danger, you are then committing armed robbery. Incidentally, extortion commonly carries just as long a prison sentence as does armed robbery.  

3. In requesting severance or a settlement, if you have a valid legal claim – such as if you were sexually molested by a boss, or if you were fired because you refused to go along with theft from a client – you can say “I will go to court, and raise these issues in Court, unless I get a settlement for my damages.” Isn’t saying that the same thing as extortion? No, not at all, because you can only go to Court if you have a valid legal claim, and not a made up one. In fact, if you made up a claim without basis in fact, and then went to Court, you could in fact be accused of, and possibly convicted of, extortion. Court is a public place, that is true, but a threat to go to Court with a valid legal claim is not extortion, though many people feel that way.

4. Many lawyers who help people gain better severance packages are called “extortionists.” Dean, I can’t count the number of times I have heard people call me that name. However, I know that I must believe my client is telling me the truth about a legal claim, I must believe he or she has a valid legal claim, and I am very careful not to threaten “You’ll be exposed,” but rather “You’ll be sued.” Being a lawyer, you tend to get used to people calling you vile things.

5. Here’s a real illustration of a demand for a settlement or severance package that was not extortion: A few years ago, the then-Governor of New Jersey got a telephone call from a lawyer who said, in effect, “My client is a man, and he says you told him he could have a state job only if he had sex with you. He has a valid sexual harassment claim. Unless you settle for $5 million, we will bring you to Court.” The Governor called the FBI and said, in effect, “I am being extorted.” The FBI said, “No, you are not. A threat to go to Court with a valid legal claim is not extortion.” That is really what happened. Oh, yes: that Governor did admit what the lawyer claimed was true, and then resigned.

I believe that, if the same lawyer said “If you don’t settle for $5 million, I will go to the newspapers,” then that lawyer would probably be in prison today. I hope you see the difference. 

If you feel you do have a valid legal claim against your employer, you may be wise to consider requesting a severance package even before one is offered to you. We offer a Model Letter to Proactively Request a Pre-Termination Severance Package. If you’d like to obtain a copy, just [click here].

And, if you think you’d like to consult with an experienced employment attorney in the Seattle, Washington, area, we offer a list of them by simply [clicking here].

Dean, I hope this is clear to you. If not, I strongly suggest you speak with a local lawyer before doing what you seem to be considering doing. I know that this can sound a lot like “lawyer-talk,” but there is a real difference – in fact and in the law – between threatening exposure and threatening a lawsuit based on a valid legal claim.

Thanks for writing in. Good luck in your upcoming transition.

Deadlines are important; don’t let your severance deadline expire. To help you ask for more time, we offer our Model Request for More Time to Review/Sign Your Severance Agreement. It shows you “What to Say and How to Say It.”™ To obtain a copy, just [click here.] Delivered by Email – Instantly!

My Best,
Al Sklover

P.S.: You might be interested in our Master 94-Point Severance Negotiation Checklist, to give you the peace of mind and freedom from worry that you forgot to raise or entertain certain points of discussion and negotiation. To obtain copy, just [click here.] Delivered by Email – Instantly!

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