Severance Packages Archives

“No Re-Hire” Clause in my Severance Agreement – Why??

Published on May 14th, 2019 by Alan L. Sklover

Sklover Working Wisdom Job Loss

Question: My employer was purchased by a competitor, and a large group of us were chosen for layoff. As part of the severance offer, I have to sign an agreement. One of the sections of the severance agreement has the title “No Re-Hire; No Application.”

It says that I will never again “seek to regain employment by the Company or any company that is affiliated with the Company.”

I haven’t done anything to deserve this, and so I am wondering why they would take that attitude toward me. It’s bad enough to lose a job, but this seems insulting. Have you ever seen this before?

Fiona
Elgin, Illinois

Answer: Dear Fiona: This is not the first time I’ve received almost this exact question. It seems like more of a kick in the pants than a reasonably gentle “goodbye.” Hopefully my explanation shines a bit more light on the otherwise troubling clause.
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Expense Reports Are Ending Careers Like Never Before

Published on September 25th, 2018 by Alan L. Sklover

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Danger Ahead:
Expense Reports Are Ending Careers Like Never Before —

According to published reports, Wells Fargo has recently suspended or terminated scores of its employees for errors and mistakes in expense reimbursement reports – believe it or not – in some cases for ordering in meals an hour before they were permitted to do so.

In the case of one terminated employee who contacted us, her intent was merely to have her meal waiting when her conference call ended, yet the outcome was her firing, her forfeiture of $2.5 million in unvested stock, and the end of her career.

Is it a coincidence that Wells Fargo also just announced that it was planning to reduce its workforce by tens of thousands of employees in the coming year?

According to published reports, Fidelity has recently terminated hundreds of employees for allegedly submitting false or misleading receipts related to employee benefit programs that permitted employees to be reimbursed for computers they purchased for work.

In finance, most of such firings or forced resignations must be reported publicly, ending not just jobs but careers and reputations, as well.

Is it a coincidence that Fidelity also just announced that it was planning on reducing its workforce by thousands in the coming year?

I am not one to believe very much in coincidences. And, I am acutely aware that fired employees must forfeit unvested equity, are not entitled to COBRA insurance benefits, and do not get offered severance. It just makes sense to me this might well make many employees especially attractive targets for such “cost savings.”

The same goes for those forced or “permitted” to resign under the dark cloud of such allegations.

And, too, clients in HR Planning suggest that, despite press reports of a shortage of workers, we may be on the verge of a large wave of layoffs – some honest, some disguised – enabled by the introduction of artificial intelligence software.

So, tread ever-so-carefully when incurring any reimbursable expense, and requesting any type of expense reimbursement. Don’t cut corners, bend the rules, or twist the truth. And don’t expect flexibility or reasonability in enforcing “the rules.” The potential consequences are so much greater than the potential benefits.

Forewarned is forearmed. Careful navigation is required.

Caution: There may be Danger Ahead.

For a review of our articles on allegations of misconduct, just [click here.]

For a complete list of our Model Letters, Model Memos, Checklists and Form Agreements, just [click here.]

To arrange a telephone consultation on strategies to deal with such workplace issues, just [click here.]

© 2018 Alan L. Sklover. All Rights Reserved. Commercial Use Strictly Prohibited

Performance Improvement Plan a Fraud? – Here’s 12 Clear Indicators

Published on December 28th, 2016 by Alan L. Sklover

 
“Corrupt politicians make the other 10 percent look bad.”

– Henry Kissinger

ACTUAL CASE HISTORY: As readers of this blogsite know, it is my professional opinion that at least 90% of Performance Improvement Plans (“PIPs”), also called Performance Enhancement Plans (“PEPs”), are fraudulent at their very core. You might be thinking “Gee, isn’t the word ‘fraud’ a little harsh? And might that “90%” be a little exaggerated?”

As an employment attorney of 30+ years, I don’t think the word “fraud” or the number 90% are one bit harsh or exaggerated, although I do appreciate that “fraud” is a “hot-button” word. It’s a serious word, not to be used lightly, and never where unjustified. But if the word is accurate, applicable, and appropriate, well, that is the word I believe should be used.

A fraud is commonly defined as “an intentional misstatement or mischaracterization of fact intended to induce action by another person to his or her detriment.” Fitting that description, I have found most Performance Improvement Plans are designed to (a) create a false record, to (b) intimidate, humiliate and infuriate employees, (c) to induce them to quit, get sick, or engage in misconduct, (d) to achieve their resigning or engaging in misconduct, all to (e) reduce headcount without severance or risk of lawsuit.

What SHOULD a Performance Improvement Plan be? Simple: a Plan to help the employee to Improve his or her Performance. Just like it is fraudulent to induce someone to buy a cat that is really a dog, so too is it fraudulent to call something a PIP if it is not a Plan designed to help an employee Improve his or her Performance.

Most often, a Performance Improvement Plan is an exercise designed and supervised by Human Resources to assist management in terminating an employee. It is a false “paper trail” to justify terminating an employee, or to induce an employee to resign instead of being fired, thus saving the employer both the expense of severance and risk of a potential lawsuit.

These days many employers are using Performance Improvement Plans to lay off employees – sometimes entire departments – by, first labeling each one a “performance issue” and an “unsuccessful PIP.” I know of one large law firm that seems to be doing this each week to lower headcount of younger associates without incurring “bad publicity.”

So how do you know if a PIP is fraudulent, and how can you demonstrate that to others?

LESSON TO LEARN: How does a doctor make a diagnosis of an illness? How do police determine if a crime has been committed? And how can an employee demonstrate to others that his or her Performance Improvement Plan is fraudulent? All in the same way: by (a) reviewing and sharing the available data, (b) identifying and describing its false nature, and (c) explaining how it is being used to create false conclusions.

The “available data” that shows a Performance Improvement Plan is fraudulent – of, if you wish, false, a misrepresentation or mischaracterization – is set forth in the PIP, itself. There are four general categories of such fraud, and within those four general categories – set forth below – a total of 12 “fraud indicators” you can use.

Identify these, describe them, and then share them with Senior Management when you “push back” against a PIP. By doing so, you will be far more likely to have all the leverage you need to either survive that Performance Improvement Plan, or get a fair severance package as a result of your doing so.

If your PIP is truly a Plan to help you Improve your Performance, then these “Indicators of PIP Fraud” should not be present in your Plan’s objectives, procedures, timetable, operation, mechanics or goals.

WHAT YOU CAN DO: If faced with a Performance Improvement Plan that you know to be unjustified to begin with, and then impossible to succeed in no matter how hard you try, push back by noting that is fraudulent. If the “fraud” word is too harsh for you, then use equivalent phrases such as “intentional misrepresentation,” “false and mischaracterizing,” or “intentional deception.”

Here are the 12 most common indicators of “Fraud by PIP,” and the particular words and phrases you can use to identify and describe them in your “PIP Push Back” memo to a member of your employer’s Senior Management:
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Heard a Recruiter is Shopping Your Job? Here’s Nine Suggested Steps

Published on December 6th, 2016 by Alan L. Sklover

 
“People don’t mind being used,
but they don’t like being discarded.”

– Unknown

ACTUAL CASE HISTORY: Barbara, a Human Resources Vice President, had worked for 12 years for a large Midwestern hospital, where she oversaw professional staff development. All seemed fine at work, and she was soon to take a vacation. She called us at the suggestion of a former client of ours.

Barbara had just received a telephone call from another HR professional she knew from attending conferences on the topic of professional staff development at hospitals. The purpose of the call from her colleague was to inquire about the hospital’s overall company culture and, specifically, its “family-friendliness.” Barbara’s colleague also asked her “Do you mind sharing with me why you are leaving?”

Leaving? Barbara had no plans to leave. The caller explained that she was told by an executive recruiter that Barbara’s position was soon to become available, and he was assembling a list of candidates to fill Barbara’s position. Barbara did not know what to say, and finally uttered, “There must be some mistake.”

Barbara found it hard to catch her breath. Was this a mistake? Was someone disappointed in her work? Her performance reviews had been “Exceeds Expectations” for years. She had not been accused of any bad behavior. Who should she speak with . . . if anyone?

Mistakes of all kinds happen. Was the caller confused about what she had heard? Was the recruiter in error? Was it possible Barbara was being replaced? Might her compensation be too high? Her creativity too low? All sorts of questions were buzzing around Barbara’s mind.

LESSON TO LEARN: In your experience, do you believe most employees find a new job before they resign from their present one? Sure, that is exactly what most employees do. Should employers do the same, that is, find a new employee before they terminate one? From their point of view, that is the exact same thing.

Is it disloyal for an employee to find a new job and then resign? No. Well, from an employer’s point of view, it is not at all disloyal for an employer to find a new employee and then terminate the one they have. Yet, most employees feel upset, perhaps taken advantage of, or abandoned, if they find out their job is being “shopped.” Why?

I think the anger, upset, even sense of being “discarded” by means of disloyalty felt by employees who find out their job is being “shopped” is due to the seeming “behind the back,” secretive nature of it all. It would seem so very “up front” to (a) be told there is a problem, and (b) work together on an orderly transition. The problem is that neither employees nor employers ever act so “up front.” They act to protect themselves and their interests. You must admit that few employees tell their employers they are out interviewing, but rather “behind the employer’s back” find a new job, and then resign.

All that said, the employee’s feelings of dishonesty, abuse, disloyalty and abandonment are real, and not to be ignored. But, your responses to hearing your job is being “shopped” cannot be based on emotions. Instead, they must be based on clear thinking, and be a focused, rational response.

If what happened to Barbara ever happens to you, what should you do? Who should you speak to . . . if anyone? Should you begin a job search of your own?

Having helped clients in this circumstance, we share with you the responses, and the order of responses, we have found are best to make in this circumstance. Taken together they represent a mindful plan of action, which is the best response of all.

WHAT YOU CAN DO: If what happened to Barbara ever happens to you, consider these steps, and, of course, modify them as seems most sensible to the specific facts, events and circumstances of your job, career and life:
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Non-Compete or Non-Solicit? Use “C.A.T.C.H.” to Understand It

Published on August 16th, 2016 by Alan L. Sklover

An Effective Way to Analyze Your Restrictions

“Limits, like fear, are often an illusion.”

– Michael Jordan

ACTUAL CASE HISTORY: For two weeks we were in a pitched battle in Federal court, trying to convince a Federal Judge to negate a non-competition agreement. Both sides had submitted legal briefs, and the Federal Judge ordered “oral argument,” which is each side giving its position, and the Judge hammering away at each side’s arguments with his questions.

Our client was a salesman in the field of medical devices, specializing in the sale of manufactured, artificial heart valves to hospitals for surgical replacement of damaged valves. After leaving his prior employer, he took a new job, and was doing quite well – until he was sued, and his new employer placed him on “Suspension – Leave of Absence” until the case was over.

In preparation for the upcoming “oral arguments” in perhaps my tenth reading of the non-competition agreement, I discovered something that no one else had discovered before, not even the Judge: the non-competition agreement was not, in fact, a non-competition agreement.

My careful reading revealed that working for a competitor was not, in fact, prohibited. What the supposed non-compete agreement prohibited was “working for a competing medical device manufacturer, anywhere in the eastern half of the United States, that sells to hospitals replacement heart valves based on the same technology.”

That last phrase, those final five words, and their importance, had somehow escaped notice by several people. There was no prohibition against working for a competitor, but only on working for a competitor while selling heart valves based on the same technology. The restriction was on using a certain technology more than it was on working for a competitor.

In fact, the new employer did not sell manufactured, artificial heart valves, but instead heart valves derived from the hearts of pigs. Neither the lawyers nor the Judge were familiar with the technology, and just assumed the same technology was used. Fortunately, I recalled hearing of the distinction during my initial, in-depth consultation with my client.

We asked permission to submit a supplemental brief to the Court on this very point, and the Judge permitted it. After conferring with their client, the former employer’s attorneys withdrew the case. Noticing just five words – based on the same technology – that’s all it took.

LESSON TO LEARN: When it comes to non-competition and non-solicitation agreements, “The answer to your question is almost always right there, in the words.” Reading dense legal agreements can sure put a lot of people to sleep – including lawyers. That’s always the case in law, but there is no substitute for careful reading and analysis, especially when it comes to non-competition agreements and non-solicitation agreements.

I have seen it time and time again: the applicability, effect, validity, and duration of non-competition and non-solicitation agreements being misread and misunderstood, and for this reason unnecessarily limiting the client’s career by false fears. I’ve seen it time and again: highly qualified and experienced lawyers telling their clients “Sorry, there is nothing we can do” when, in fact, all that is necessary to win a person’s employment freedom is to read and analyze carefully.

To assist you in doing that for yourself, in my 30+ years of handling non-competition and non-solicitation disputes, I’ve devised a rather simple way to analyze non-competition and non-solicitation agreements. It’s what I have come to call “C.A.T.C.H.,” which stands for (1) Competition, (2) Activity, (3) Time, (4) Conditions, and (5) Horizon.

This is not the usual, hackneyed “Geography, Duration, Scope” legal analysis that so many lawyers will refer to when discussing non-competition agreements. What they would be talking about is that a Judge will often look at the reasonableness of the restrictions’ “Geography, Duration, Scope” and cut one or more of them down if the Judge thinks they are unreasonable.

Our “C.A.T.C.H.” analysis is more immediate, more valuable and more important: “Does this non-competition or non-solicitation agreement even apply to you?” Might careful reading and analysis reveal you have no reason to hire an attorney, due to potentially unfounded fear based on an incorrect analysis? Why hire an attorney, and consider going to Court, if you really don’t need to? More importantly, why turn down a job offer, or not seek one, if you are not really restricted?

This endeavor is not “legal nit-picking.” Instead, it is the essential task of every employed person: to protect your employment freedom, and to utilize your business skills, experience and relations to your very best advantage.

I hope you find my “C.A.T.C.H.” analysis helpful, and its title a little “catchy.”

WHAT YOU CAN DO: Here’s eight steps you can use to help yourself understand whether or not, how badly or not, you may be restricted by a non-competition agreement or non-solicitation clause you have signed, or you may be asked to sign. And, too, they may help you understand how to get around any such restrictions. As Michael Jordan says, “Limits, like fear, are often an illusion.”
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Alan L. Sklover

Alan L. Sklover

Employment Attorney
and Career Strategist
for over 35 years

Job Security and Career Success now depend on knowing how to navigate and negotiate to gain the most for your skills, time and efforts. Learn the trade secrets and 'uncommon common sense' of Attorney Alan L. Sklover, the leading authority on "Negotiating for Yourself at Work™".

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