“What should I ask for regarding severance?”

Question: I am a Director of Clinical Research at a start-up medical device company making a very healthy salary. I have had excellent performance reviews and no problems. I was laid off last week with the statement “You are an exceptional employee and met/exceeded all expectations, but we are replacing you with another woman from where I previously worked.” 

I was offered 8 weeks severance. My state is an “at will” state, but this seems a very small severance for my level. It will take me months to find a job. 

What can and should I ask for when I send a letter back to negotiate? 

Mindy
Lakeville, Minnesota 

Answer: Dear Mindy: Your letter illustrates a number of important thoughts for people faced, as you are, with being laid off, and the need to negotiate severance for yourself.   

1. One thing you need to understand, first and foremost: severance is not paid out primarily based on how much you need it. Having worked with fired, downsized and laid off employees for over three decades, I know that every laid off employee feels, first and foremost, financial insecurity. How am I going to pay the bills? What if it takes me years to replace this job? What can I cut in our family’s budget that is not already cut “to the bone?” Those thoughts, however, are not helpful; what is more helpful is focusing on what might motivate your employer to give you more severance.  

The number of weeks or months of salary and/or benefits you ask for as your severance will not motivate your employer to give you more severance; instead, your employer will focus on this: why it may be good for him or her to do so. This is key to keep in your mind.    

2. You mention three things that you believe justify greater or “better” severance: (i) your excellent performance; (ii) your “level,” and (iii) the difficulty in finding a new job. Each of these things may be presented as reasons to give you more severance, but based on my experience, your employer’s probable response to each one – whether said or thought – will likely be, corresponding to each of your three reasons noted above, (i) her job was to do excellent work, (ii) because her severance is based on her high salary, her severance does already reflect her “level,” and (iii) it is hard for everyone to find a job these days.   

As I noted above, what you ask for in severance should be tied to what your employer is concerned about, not what you are concerned about. In other words, the facts you provide in your note to me are not as helpful in determining what is reasonable in your situation to ask for as severance, as would be thoughts that might make your employer consider (a) whether it is possible that there is something they can give you that they can more readily afford to provide, (b) whether there is some interest they might have that would be improved by them providing you better severance, and (c) whether it is possible that, if they gave you better severance they might save in legal expense and possible “disruption.” 

3. I urge you to consider non-monetary severance requests, in addition to monetary ones; though they can’t be used to pay the rent or mortgage, sometimes they are of equal or greater “value” in the long run. In my book “Fired, Downsized, or Laid Off,” I devote an entire chapter to 110 different – but valuable – “non-monetary” requests I have successfully negotiated for my clients. They might include such things as (a) a positive reference, (b) permitting you to retain a laptop computer, cell phone, tablet or other equipment you have used, (c) payment of some of your COBRA health insurance premiums, (d) agreement to permit you to retain copies of research you have done in the past to serve as “portfolio” material to show future potential employers, (e) proactive assistance in helping you locate and secure new employment, (f) vesting of unvested stock or stock options previously awarded, (g) release from a non-compete agreement, and (h) agreement that, if your successor does not work out well in your position, you will be rehired or at least reconsidered.  

We offer a 94-Point Master Severance Negotiation Checklist to make sure you don’t miss any severance-related issues or fail to spot problems in severance agreements. Sure helps to reduce anxiety! To obtain a copy, just [click here.] Delivered by Email – Instantly! 

You might even consider asking if you can “volunteer” in the meantime in research, grant-writing, or business development where you would get a percentage of the revenue you brought in, giving you the appearance of being employed, and possible payment, both without extra cost to your employer.     

4. There are six factors you should use to determine what severance to ask for, because it is these six factors that might get you more severance: 

(i) Is there anything you might be able to do to assist your employer in the future, such as being available to transition to your successor your duties, your relations and your “legacy” knowledge – that might be worth paying you more severance, or delaying your anticipated departure?  

(ii) Has your employer failed to honor any expression, commitment, assurance or promise of any kind that you relied on and now justifies your request for payment for it now? To eliminate the issue and its possibly attendant legal costs to resolve, your employer might offer to compromise with you on it.

(iii) Is there any chance the decision to replace you was based on an improper motivation, such as your age, pregnancy, religion, race, disability or the like? Same thing here: if you believe the underlying motivation might have been improper, your employer may well be interested in resolving the matter by providing greater severance.

(iv) Has your reputation been harmed by anything that your employer’s executives have said or done? Same thing here.

(v) Is there any chance you have been chosen for layoff because you objected to wrongdoing, dishonesty, impropriety or illegality, and then been retaliated against by your termination? In my experience, sound allegations of retaliation are usually the greatest motivator for improved severance. 

(vi) Finally, if your family is in unusually difficult circumstances – such as a gravely ill child or a parent undergoing expensive chemotherapy – that may create empathy that might translate into increased severance payment, or one of the “non-monetary” types of severance noted above. 

Using these things, I would suggest you consider (a) what more monetary severance seems appropriate. To me, depending on how long you’ve been with your employer, I think six months might be a good place to start – including salary and benefits, and perhaps importantly, the vesting of any unvested stock awards that may have been made to you. Of course, the greater “leverage” in the six kinds of leverage noted above, the more you can ask for. 

I’d also suggest you consider the various types of “non-monetary” awards you might seek, as employers are always interested in providing things that do not cost them, or do not cost them too much. 

To request more or better severance, you might want to obtain a copy of one of our most popular model letters: Model Letter Requesting Additional Severance. It shows you  What to Say and How to Say It.”™  To obtain a copy, just [click here.] Delivered by Email – Instantly! 

Mindy, I hope this is helpful to you, and that you will be guided more by your leverage and facts of your matter than you are by “what I need.” Please consider telling your friends, family and colleagues about our blog – we’d REALLY appreciate that!!

My Best,
Al Sklover

P.S.: New! We now offer by either (a) PDF from your desktop printer, or (b) digital download to your tablet a copy of my well-regarded book, “Fired, Downsized, or Laid Off,” the unofficial “bible” of how to negotiate severance. If you would like to obtain a digital copy for your tablet, just [click here] or for your desktop printer, just [click here.] 

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