How to Negotiate Severance
From my Twitter thread on the same.
I found little about negotiating #severance when I needed it, so after spending $1500 and a month working with a lawyer to negotiate mine, and ultimately walking away, I’m sharing some thoughts and what I wish I’d known about severance agreements and negotiating them in hopes that it will help others figure out what to do and recover from layoffs faster.
#SeverancePay #SeveranceAgreement #SeveranceNegotiation
Disclaimer, CA Lawyers, and Note About Unions
First, a disclaimer: I’m happy to empathize as I have bandwidth, but I’m not a lawyer, and my experience was in California. To negotiate, you will probably need a lawyer, though you could try on your own (see my recommendation below). Alternatively, sometimes unions can do the negotiating (see a list of tech and non-tech unions here). Avoid lawyers that also may have done work for the company that terminated your employment. To find a lawyer in non-California locations in the U.S., take a look at NELA.
These are the (mostly Northern) California employment lawyers recommended to me:
- Quintana Hanafi — https://qhplaw.com/
- Lawless, Lawless & McGrath — https://www.lawless-lawless.com/
- Rudy Exelrod Zieff & Lowe — https://rezlaw.com/
- Kramer — https://www.kramerlaw.com/
- Costin Law — http://costinlawfirm.com/
- Smith Shapourian Mignano — https://www.smithshapourian.com/
- Siegel Lewitter Malkani — https://www.sl-employmentlaw.com/
- Minnis & Smallets — https://www.minnisandsmallets.com/
- Lubin Olson — https://www.lubinolson.com/
- Minnard Law — https://www.minnardlaw.com/
- Levy Vinick Burrell Hyams — https://levyvinick.com/
- McHenry Law Firm — https://www.mchenryemployment.com/
- Bluer & Bluer — https://bluerlaw.com/
- Kosinski + Thiagaraj — https://ktlawsf.com
What I Learned About Severance Agreements
It’s considered standard for companies to pay at least two weeks of severance pay per year worked. I heard of bigger, more financially-stable companies that generously offer one month or more of pay per year worked.
Make sure that severance pay will be paid in a single lump sum right away and that the company will not block your unemployment insurance claim. Your HR file can be legally requested (at least in California), so no need to include that in an agreement or negotiation.
Non-disclosure, confidentiality, and non-disparagement clauses in severance agreements are basically hush money bribery and should be illegal — the company was a huge part of your life for years, then you’re treated horrifically, and you have to bottle that up to pay your bills? [Update in spring 2023: the NLRB General Counsel Jennifer Abruzzo issued a memo saying that broad non-disparagement clauses are illegal, as well as one that non-competes violate the National Labor Relations Act)! Exceptions include giving false and malicious statements (which count as defamation), sharing trade secrets, and people who are supervisors (see more helpful info here). Meghan Hurlburt, a labor organizer, explains that memos like this one from the “boss” of the NLRB guide “the people who make decisions on behalf of the board, which in time will create case precedent on how to rule in future cases. For workers, this means that we can expect the current NLRB to rule in favor of workers in cases where a company attempts to enforce a broad non-compete.”]
People can’t process if they’re silenced. #NDAs inflict more trauma on top of the impact of the layoff. Thanks to @annisms and @MicheleRSimon for speaking up about this!
More and more people are negotiating the removal of silencing clauses from severance agreements, esp. in states that have lifted gag orders, like WA and CA (the Silenced No More Act). Hopefully, more states and companies will be ethical and remove them from standard agreements.
For people in the U.S., it could be good to familiarize yourself with these employment laws:
- Age Discrimination in Employment Act
- Americans with Disabilities Act
- Fair Labor Standards Act
- Family and Medical Leave Act
- National Labor Relations Act
- OSHA
- Title VII of the Civil Rights Act
- WARN Act
The WARN (Worker Adjustment and Retraining Notification) Act applies to businesses employing over 100 people doing mass layoffs. They are required to either give 60 days of notice, in writing, or to pay employees. Taking legal action with violations of this law could result in you receiving pay and benefits you would have had during that time. Some states have “mini-WARN” laws. Check here.
Many silencing clauses specify who you can talk to and those are usually spouses, lawyers, and financial advisors — but only if they first agree to confidentiality as well! At the very least, I’d like to see partners, family members, friends, and therapists added to that list.
These are not “amicable” agreements as claimed. I was to release the company and related persons from ANY and ALL claims, known OR UNKNOWN, FOREVER. But a later provision stated that some claims are protected (which is it?!).
You could also be asked to agree that you’ve NEVER complained about ANY wrongdoing to the company, and you haven’t ALREADY said anything about the agreement to ANY third parties. You’re seriously signing away so much, even true past actions and things you don’t know about.
“Non-disparagement” includes any statement that can be INTERPRETED as negative. My lawyer repeatedly warned me that anything could be twisted and non-disparagement is effectively full confidentiality. At the very least, make sure false and malicious statements are specified.
Many agreements include a one-way “remedies” clause that says how much the company will charge you if you don’t adhere perfectly to the agreement. $5,000 is really high. More like $500 is normal (but still objectionable).
The general language in these severance agreements makes it really hard to know what exactly might constitute a breach. There’s just no being certain that they won’t interpret something completely innocent as a breach, send you an injunction, and charge you for attorney fees.
The broadness of what you’re agreeing to for severance pay feels like they intentionally want you to worry so much that you never say a single thing, even if the long-term stress of staying silent is going to kill you. It’s very threatening.
Don’t fall for the company’s lawyers’ reassurances that something won’t be enforced — if it’s in the doc you signed, assume it’s enforceable. You could ask for the reassurances or exceptions to be made official in the agreement, but removing the problematic language is better.
Don’t be surprised if the company’s lawyers try to distract from the real problem (discrimination, for example) and weaken your argument by criticizing you and your work. Remember your contributions and stay focused on the issue.
Any severance agreement should at the very, very least include MUTUAL agreements — the company should also agree not to defame you, for example. Oh, and a lot of this thread applies to employment contracts and dispute settlements as well.
Selecting a Lawyer
Frustratingly, my lawyer was more of a mediator than a negotiator. Do better than I did and don’t feel rushed to pick a lawyer. Make sure they understand the full situation, know the ins and outs of the laws mentioned below, and plan to truly negotiate for what is important to you.
Contact lawyers and do some intake calls, which are usually free, where you answer a lot of questions and describe the situation so both of you can decide if you want to work together. It’s great if you send them a doc with all the info about the situation ahead of time.
Some lawyers charge per hour ($400+). And some lawyers have you pay a retainer upfront and take cuts (I’ve heard 30–40%) of any money awarded, and if there isn’t money awarded, you may be required to pay fees, which could be in the thousands. Others have no retainer fee and only take a cut if they win the case, and in the case of a loss, you only pay administrative fees.
Beware as you plan for paying a lawyer that with discrimination cases, you could go all the way to court, which would be public and could take years. I can’t imagine how stressful this must be. I have even more respect for people who went through this to make change for everyone, like @ekp, @IfeomaOzoma, and @FrancoiseBr.
People often ask for mediation first. JAMS is popular in the San Francisco Bay Area, and they’ll go back and forth between you and the company representatives until an agreement is reached — maybe they have to do some inclusion training and pay you several thousand to millions.
Try not to feel rushed to make a decision about an agreement (though the limbo is terribly stressful). By law, companies must give you a “reasonable” amount of time to consider, usually 5–14 days for people under 40, and most companies are willing to extend if asked.
If you’re 40 or older, you must be given more time to consider a severance agreement — 21 days if it’s just you being let go or 45 days if there’s a group of you — and you have 7 days after signing to change your mind.
I recommend reading through the whole severance agreement several times and even “translating” each sentence from legalese to simple language so you’re sure you understand what’s included. Look into parts you have questions about or don’t feel comfortable with.
If you have no qualms, you can sign before the deadline, but make sure to seriously consider the options. Think about reasons to sign and reasons not to sign, assess which are most important to you, and feel out which direction is most aligned with the person you want to be.
Taking Charge
I think it could have been really empowering for me to negotiate with a lawyer as backup, though I definitely would have needed some time to get into the right state of mind.
If you have the emotional bandwidth, you could try negotiating your severance agreement with a lawyer as backup like this:
- CC a lawyer in an email to the company’s legal team (make sure you get this contact info before your last day!).
- Present justifications for negotiating (discrimination or unfair treatment, issues with official documents and what you were told, the time a recruiter says you’d need to find a new job, big bills to pay, approved budget for canceled projects, the value of your work, etc.).
- List your requests (removal of silencing clauses, fair severance pay, upcoming stock, emotional damages, a reduced material breach, your laptop, the value of an upcoming vacation, etc.). You could even share an edited Google Doc.
- End with, “I am confident we can find a solution that works for both of us and hope we can resolve this amicably without the need for legal action.” (H/t to @DelyanneMoney and her employment law days.)
- Hear what they have to say and make counter-offers. The sooner you can figure out what you’re willing and not willing to do, the better this process will be.
If you can’t make do without the severance pay offered, then negotiating is even more worth it so you can be as comfortable as possible agreeing to the terms.
Apply for #unemployment benefits right away, but don’t expect them to fully cover your bills or even your first week without a job upfront. And if you’re hesitant about applying, remember that your past taxes have paid for this program to help you and others in your situation.
If a hostile work environment made you quit, your situation could be considered a “constructive discharge” and you could still be eligible for unemployment benefits. Talk to a lawyer.
Another resource you could check out is @Paulflevy and Farzana Mohamed’s book, Don’t sign anything: A guide for the day you are laid off.
Take Care of Yourself
If you’re not currently dealing with a #layoff, do all you can to save up that #FYouMoney in a high-yield savings account just in case to tide you over while you’re negotiating severance and/or to empower you to walk away! And make a Wellness Recovery Action Plan.
To the people who need this info the most right now: my heart goes out to you. Regardless of what happens with severance, being laid off is a terrible, long roller coaster ride that you didn’t ask for. And it’s true that it takes more time than you might expect to recover.
Be gentle with yourself and your calendar. Identify your feelings, question your automatic thoughts with the Woebot app, meditate with Insight Timer, make an effort to recognize things you’re grateful for or delighted by, and talk to people you trust who can actively listen. Use your Wellness Recovery Action Plan.
Journal, take ashwagandha, get regular and plentiful sleep, pack up your company swag for a while, enjoy some fresh air and your favorite foods, pet something fluffy and sweet — do whatever helps you heal, even if that means doing nothing at all.
My Own Experience
I hired a lawyer to negotiate my severance agreement, and it was a stressful, draining experience that took weeks longer than either of us expected.
It was important to me to be able to talk about my experience and be on board with everything in the agreement. There was a lot of back and forth, but Twilio would only increase from a measly 4 weeks of severance pay to 7 OR give up the NDA/confidentiality clause, not both.
And there were SO many issues with the severance agreement language that didn’t feel honest, like agreeing I’d never reported any allegations of wrongdoing to anyone at the company. How can you agree to not having done something you did?
I carefully considered my mental health, how much I value communication and integrity, the fiduciary responsibility I feel to my communities and mentees to share my tech industry experiences, and what it would mean to accept and release the disrespect shown.
I listed my reasons to sign and reasons not to and when it was very clear that the reasons not to sign were more important to me, and that I would be more proud of myself for not signing, I knew I had to walk away. I know it was a HUGE privilege to be able to do that.
As a class straddler, I’ve worked hard to build up my savings and not feel so worried about and limited by finances and a scarcity mindset. I really abhorred the idea of making a permanent decision purely because of money. No judgment to those who have to.
And Twilio not offering much, pushing for a decision on their timeline, and requiring a whopping $5,000 for each breach of contract actually made it easier to say no.
What was really maddening was when they had a more public layoff of 11% of the staff shortly thereafter and offered twelve weeks of pay (vs. my 4), plus one week for every year of service, and the full value of Twilio’s next stock vest “because the Twilions who are leaving us are shareholders too — which is important to us.” The disparity in what was offered says a lot about how much they really care—in my case that would have been a difference of $78,545.41!
Conclusion
There are many things you can do to advocate for yourself after a layoff. The emotional impact of such an experience can make it difficult, but it’s worth at least exploring the options. Hopefully this post helps you understand a little more about what you can do when you’re offered severance.
Thank you to folks who helped me learn all of the info shared here—I’m paying forward your kindness with this post.
