By: Eva Zelson
On: March 31, 2025
Negotiating a stronger severance package can be a daunting task for individuals, especially when facing financial uncertainty. Understanding all the nuances and complexities that may account for negotiating a fair and equitable severance package often require expert employment law attorneys to protect both your rights and your own interests. If you are faced with negotiating the terms of a potential severance package, here are some essential tips to utilize.
What is a Severance Package?
In cases where an employee is terminated through no fault of their own, such as layoffs from workforce reductions or displacements through mergers or acquisitions, employers in some instances will offer a severance package, a monetary payment, that is usually based on the length of their employment. Severance plans are typically designed to provide financial support to employees who lose their jobs through no fault of their own, helping them transition during periods of unemployment.
There are no legal mandates requiring severance packages in the Fair Labor Standards Act, and when these agreements exist, they exist solely between the employer and the employee. In many cases, severance packages include a waiver preventing employees from pursuing legal claims against their former employer. This highlights the importance of legal guidance when negotiating severance agreements. Additionally, a recent National Labor Relations Board ruling determined that employers cannot require employees to broadly waive their rights under the National Labor Relations Act as a condition of receiving severance.
Why Negotiating Your Severance Package Matters
Negotiating a better severance package is critical to preserve your future, financially and professionally, but also your overall wellbeing during this difficult period of time. The financial negotiation can extend the period of time to seek suitable employment and also extend insurance coverage, thus eliminating major stressors. Through negotiating your severance package with an attorney, individuals can also achieve favorable terms with non-compete clauses, recommendation letters, positive employer perceptions, all of which can benefit the former employee professionally. The protection of your legal rights and protection yourself from the potential of future disputes all be generated from successful severance package negotiations.
Common Myths About Negotiating A Better Severance Package
Many people are unfamiliar with how severance package negotiations work. Obtaining the expertise of a veteran employment attorney is an invaluable means to navigate this process. Common misconceptions on severance package negotiations include:
- “Severance terms are non-negotiable.”
- “The first offer is the best I’ll get.”
- “If I negotiate, they might take the offer away.”
- “Severance calculators give me a definitive answer.”
- “I have to sign the severance agreement immediately.”
The reality when encountering a severance package deal is that there are multiple factors to be considered and negotiated for your best interest.
Most Employers Expect Some Negotiation With a Severance Package
The majority of severance packages are negotiable, most employers actually expect some level of negotiations in reaching an agreement. Employers often see a severance package as means to obtain a release of claims and to mitigate future legal actions. Often many companies have flexibility to adjust their standard severance offerings to the circumstance for individual cases in these particular situations there is a need for severance package negotiations. Severance package negotiations is also a means of maintaining positive relations and publicity.
A Guide to Negotiating a Stronger Severance Package
Having a clear plan is essential for success in negotiating severance packages. The following steps can significantly benefit your negotiations.
Decide Whether to Negotiate Your Severance Package Alone or With Legal Support
Due to the complexity surrounding severance negotiations, obtaining expert employment law legal advice is a basic necessity. Legal support can maximize your benefits and protect your legal rights.
Develop a Logical and Fair Counteroffer for Your Severance Package
A key component in negotiations is identifying your bargaining power. The more power or leverage you have, the more favorable your outcome can be. Special considerations need to be given to the amount of payment, length of payment, and other benefits that should be present in your counteroffer.
Address Restrictive Clauses in Your Severance Package
A critical element that should be addressed in severance negotiations is restrictive non-compete, non-disparagement, and sign-on bonus clawback agreements. Careful attention to these clauses can prevent limitations on prospective job opportunities and unforeseen tax consequences.
Communicate Severance Package Requests Professionally
It is essential to communicate with the employer in a professional and assertive manner. Negotiations should focus on your professional record such as length of employment and performance records rather than personal details.
Handle Employer Pushback & Finalize the Severance Package
Some employers will try and push you to quickly sign your severance agreement; take your time to review and develop counteroffers. You must realize that you have the right to refuse. Severance refusal may negate compensation through the package, but would enable you to seek legal action.
Avoiding Common Mistakes in Severance Negotiations
There often lies a myriad of severance negotiation pitfalls that lie before employees. Seeking legal expertise is the best way to avoid costly mistakes in negotiations. Seeking legal counsel significantly increases better outcomes.
Final Thoughts: Get the Severance You Deserve
If you are mired down in severance negotiations, the employment law experts at Zeff Law Firm can advocate for your fair severance package while protecting your rights and best interests. To learn how our expertise can advocate for you and negotiate a fair severance package, contact us today for your free consultation.