Dear Matt: I was laid off and offered a severance package by my company. I am a non-union, non-contract employee. Do I have any rights and can I negotiate a different severance package? What options do I have?
Matt: Generally, when you accept a severance package you must sign a waiver to release the company from further claims (or you give up certain rights), and before doing that, you want to make sure this is the best decision for you, says Carole Arndt, of St. Paul-based The Human Resource EDGE, Inc. Companies receive legal advice in preparing severance agreements - and it is important for you to do the same, if needed, using the attorney as a behind-the-scenes negotiator or coach who can help make the best decisions.
There is nothing that says you can or can't negotiate a severance package that includes more pay, outplacement services, training, benefits extension or more, says Arndt. Also, this is a shocking blow to many, so take your time and make sure you understand terms before agreeing. Most employers will respect those wishes. Carol E. Gilson, vice president of HR & Client Services of Minneapolis-based EMPO Corporation, says most employers will respect a reasonable counter offer, but if an employee makes an unreasonable offer, the employer may, indeed, take the offer off the table.
Most companies want the severance package to be a win-win situation and are usually willing to listen to a compelling proposal, says Arndt.
If the situation is a mass layoff or plant closing, the employer likely has created a standardized severance package for all affected employees, says Karen S. Johnston, an attorney with Minneapolis-based Henson & Efron, P.A. For example, the employer may offer a certain amount of pay based on length of service and a subsidy for health insurance continuation premiums for a short period of time. In cases where larger numbers of employees are involved, the employer is unlikely to agree to negotiate with any one employee out of concern that it will end up negotiating with all affected employees. In these situations, the employer's offer is probably of a take-it-or-leave-it nature, adds Johnston.
If only one employee is affected by the layoff (or perhaps a very small number), there may be more opportunities for negotiation around the amount of severance payment, the length of a health insurance continuation subsidy or a trade-off between cash and benefits.
The employer's willingness to negotiate may depend on the employer's financial situation, the employee's seniority and work record, what the employer has done in other similar situations and the corporate culture, says Johnston.
Matt Krumrie is a freelance writer from Inver Grove Heights, and has nine years of experience reporting on the employment industry. The first Sunday of each month this column will answer readers' questions. E-mail questions or subject ideas to AskMatt@startribune.com.