“Offered severance at the end of a Performance Improvement Plan; can I ask for more?”

Question: First let me say that I appreciate and think your blog is a must read. I wish I could afford you as my attorney! But this is not about me, but my wife.

She was put on a Performance Improvement Plan (“PIP”) at first for 30 days, then for 60, and now she is told that she has to resign “or else.” She has been with this company for 8 years, 11 months with no previous performance issues. They are offering her a severance package of 13 weeks, plus she would get her quarterly bonus. She has a very poor director she reports to and can not work for this person any more.

What else should she negotiate into her package? And can she get unemployment in Ohio after the severance is paid out?

Thank you for your advice, and I hope one day I can repay the favor.

Dave S.
Grove City, Ohio
Retired Vietnam Veteran

Answer: Dear Dave, First let me say to you that I humbly salute you for your service to this country that, sadly, was not sufficiently appreciated by enough people. Compared to your efforts on this country’s behalf, my blog work is downright trivial. Dave, you have nothing to repay me for; every American and I owe you plenty.           

1. Whenever an employee is terminated – whether for alleged performance or otherwise – severance is a negotiable transaction. No matter what your wife may be told by Human Resources, severance is highly negotiable. Sure, when being terminated employees feel powerless, overwhelmed, and weak, but it is important that they understand that they are actually in a stronger bargaining position than are their employers. Heck, after losing your job of 9 years, and being falsely accused of being a poor performer, there’s not too much else to lose. I hope you and your wife have reviewed the many articles and videos I have on the blogsite about severance.

I particularly hope your wife reviews my YouTube video entitled “The Six Sources of Leverage in Severance.” She can do so by [clicking here.]  

2. There are five things most commonly asked for – and granted – in severance. They are (i) more payments of base salary, (ii) more bonus, (iii) extension of benefits usually provided, especially healthcare related, (iv) additional contributions to 401(k) or pension, and (v) a positive statement about departure, we call a “departure statement” attesting to positive attitude, loyalty, and dedication, all of which your wife surely exhibited.

By the way, if your wife can simply request leaving her job a month later than her employer had planned, that would give your wife the equivalent of (i) one more month of salary, (ii) one more month of bonus, (iii) one more month of benefits, and (iv) one more month of 401(k) or pension credits. It would also give her an opportunity to look for a job while employed, which always makes a job applicant appear more valuable.

3. These are the five things that are next-most commonly asked for – and granted – in severance: (i) an extension of time before termination, as noted above, (ii) more stock options or other “equity” to vest, (iii) freedom from future non-compete restrictions, (iv) outplacement or educational assistance, and (v) most importantly for your wife, that the company will not contest her application for unemployment benefits.   

Dave, it is a general rule that people who have become unemployed due to a resignation are not entitled to unemployment benefits. Of course, your wife is not truly “voluntarily” resigning. But that can be confusing to a clerk in the Unemployment Office. Also, it gives your wife’s employer a way to deny her unemployment benefits. Make sure she requests – in her severance agreement – that her employer will not contest any application she may make for unemployment benefits. And make sure, too, that she does not indicate on her unemployment benefits that she voluntarily resigned, but rather that she was truly fired, which she is being, in reality.  

4. Severance requests are limited only by your imagination: whatever can help you “get to a better place” in life is something you should consider asking for. In my book, “Fired, Downsized, or Laid Off,” my favorite chapter is Chapter 18, which is entitled “Customize Your Requests: The 101 True Severance Secrets.” It sets forth 101 different things a terminated employee can ask for. The real “secret” to severance is that it is, and should be, “customizable” to a person’s circumstances. To obtain a copy of Chapter 18 simply [click here.]

5. In Ohio, receiving severance will not prevent collection of unemployment benefits, but the number of weeks unemployment benefits will be paid to such a person is reduced by the number of weeks the unemployed person is paid severance. This scenario is becoming more and more common, as states seek ways to control their unemployment burden.

Notice this strange effect: If your wife’s employer would be willing to not pay her any severance, but instead keep her “on the books” for 13 weeks (perhaps while she stayed at home), then (a) she would get 13 more weeks of employment benefits such as continued healthcare, and (b) when she was let go, she would not suffer any reduction in the number of weeks she would receive unemployment. That makes such a request even more valuable than is commonly the case.

If you would like to read more about how Ohio addresses eligibility and calculation of  unemployment benefits, just go to www.unemployment.ohio.gov

And we also offer (i) a Model Memo to Request More Severance [click here], (ii) our 94-Point Master Severance Checklist [click here], or (iii) our “Ultimate Package” of Severance Memos, Letters and Checklists [click here.]

Dave, I truly hope this is helpful. Thanks so much for writing in. Please tell others about our blog – there are a lot of people facing difficulties out there. Once again, I salute you! 

My Best,
Al Sklover

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