Can You Negotiate a Better Severance Package? Here’s How

Negotiating a better severance package starts with knowing your options. Once you know what you want, then you can make informed decisions about how to approach negotiating with your employer. An experienced Philadelphia employment lawyer can walk you through everything you need to know and then negotiate with your employer on your behalf.

If your employer has offered you a severance package, should you accept the offer as-is? Or, can (and should) you negotiate?

While there are no guarantees, employers will be willing to negotiate employees’ severance packages in many cases. If you have received a severance agreement from your employer, it is important to ensure that you make an informed decision about signing. This includes not only deciding whether to sign the agreement as-is, but deciding whether to sign the agreement at all.

7 Tips for Negotiating a Better Severance Package

When evaluating a proposed severance agreement, there are several important factors to consider. Here are some key considerations related to negotiating for a better severance package:

1. Do Not Sign Your Severance Agreement As-Is

First and foremost, if you are intending to negotiate, you should not sign the agreement in its current form. Even if your employer imposes a deadline, you are not required to sign the agreement—and, if you do, you will be bound by the terms your employer has unilaterally proposed.

With that said, if your employer has imposed a deadline, the offer may go off of the table once the deadline expires. So, to protect your options, you should work with an experienced employment lawyer to make informed decisions promptly.

2. Consider All of Your Options

When considering a severance agreement, it is important to ensure that you are considering all of the options you have available. This includes (but is not limited to) your options regarding:

Severance and payment structuring
Stock options and other forms of compensation
Health insurance coverage
Retirement account contributions and other benefits
Recommendations for future employment

Once you have identified all of your options, then you can decide what you are (and aren’t) willing to accept. While some employers offer reasonable settlement packages from the outset, there is also a very real possibility that you have the opportunity to secure significantly more than your employer is offering.

3. Consider Strategies for Tax Mitigation

When considering your options, it is also important to consider strategies for tax mitigation. Oftentimes, there will be ways that employers and employees can mitigate their overall tax liability, and leveraging these strategies could help maximize the amount that you receive.

4. Leverage Your Legal Rights

You also should not hesitate to leverage your legal rights, if warranted. Severance agreements generally include a waiver of the employee’s right to sue for any claims arising in the course of employment. If you have a claim against your employer (i.e., a claim for discrimination or harassment) and the value of your claim exceeds the value of your employer’s proposed settlement package, you can (and should) use this during the negotiation process.

5. Make Informed Decisions Focused on the Future

As you consider your options, it is important to focus on the future. While the financial terms of your severance agreement may be top of mind, they are not the only terms to consider. Other common terms that can have long-term implications include:

Confidentiality clauses
Non-competition covenants
Non-solicitation covenants
Waivers
Dispute resolution clauses

These terms (among others) can impact everything from your future employment prospects to your future liability. By looking ahead, you can avoid overlooking potential issues during your negotiations.

6. Be Patient

Negotiating a severance agreement can take time—and employers will often try to use this to their advantage. As you go through the severance negotiation process, it is important to be patient, and you should not sign unless and until you are confident that it is in your best interests to do so.

7. Work with an Experienced Employment Lawyer

From helping you assess your options to negotiating with your employer on your behalf, there are several important ways an experienced employment lawyer can help you in this scenario. You can get started with a free initial consultation; and, after speaking with a lawyer, you can decide whether you want to move forward.

FAQs: Negotiating Your Severance Agreement with Your Employer

Are severance agreements negotiable?

As a general principle, yes, severance agreements are negotiable. However, it is up to individual employers to decide whether (and to what extent) they are willing to negotiate with their employees. With that said, many employers will be willing to negotiate in good faith when warranted, and negotiating the terms of your severance package could be critical for protecting your interests going forward.

Which terms should I negotiate in my severance agreement?

The specific terms you should negotiate depend on the language of your severance agreement and your individual circumstances. An experienced employment lawyer will be able to help you make informed decisions with your long-term best interests in mind.

What if I have a claim against my employer?

If you have a claim against your employer, you may be able to use this to your advantage during the severance negotiation process. Alternatively, if entering into an agreement with your employer is not in your best interests, you have the right to reject your employer’s offer and pursue legal remedies through the appropriate means.

How an Employment Lawyer at Murphy Law Group Can Help

At Murphy Law Group, we help executives and other employees make informed decisions about the terms of their severance packages. We also negotiate on behalf of our clients and pursue legal claims on behalf of our clients when warranted. We offer free initial consultations, and we are more than happy to provide the insights you need to make informed decisions about your next steps.

Discuss Your Severance Agreement with a Philadelphia Employment Lawyer at Murphy Law Group

If you would like to discuss your severance agreement with an experienced Philadelphia employment lawyer, we invite you to get in touch. To schedule a free initial consultation at Murphy Law Group, call us at 267-273-1054 or contact us online today.