Clear, Confident Help To Solve Your Legal Problems

Negotiating a better severance agreement

On Behalf of | Dec 22, 2020 | Employment Law

One way to make the best of a job loss is to negotiate a better severance package. A strong severance package may also be an option for seeking relief from an employer who violated employment law.

Employee handbook and law

Termination may provide the opportunity for negotiating a fair and reasonable agreement. A severance agreement can provide financial benefits and help an employee’s career.

Although employers are usually not required offer severance pay, some employers have policies governing severance. It is essential that you review your employment contract and employee handbook to assure that the employer is complying with its policies. Point out any discrepancies during your negotiations.

Employers may also provide severance pay or other benefits to avoid a lawsuit. They may have fired an employee or engaged in other conduct because of their disability race, gender, age, national origin, or religion. Employers may not fire an employee as retaliation for reporting an employee acting unlawfully or for other protected activity.


A terminated employee also faces issues concerning unvested benefits, health insurance, reputation, and their job search for a new job. In addition to money, a severance package could address those issues.

Employees can ask for more money although this may be connected to your length of employment. A worker may seek installment payments so that they receive income when they look for a new job. If there are concerns about the company’s performance, workers can seek a lump sum payment.

You can ask to stay with the company as a paid contractor while looking for another job. Your employer may also agree how to respond when a reference is sought from potential employers. Some companies offer career coaching, training, or other outplacement services.

Employees may negotiate payment of the unvested portion of their retirement plan or ask that upcoming vesting occur earlier. You can ask that stock options continue or vest early. Vesting, however, cannot change with 401(k) and defined pension contribution plans governed by federal laws.

Heath care coverage is a typical concern. A severance agreement may contain health insurance coverage until you get a new job or other extended period.


Employees must talk to the right individuals which are hopefully mentors or allies. Describe why your severance package may be inadequate and your achievements.

Because companies may take a general approach, it is important to engage in these discussions. Explaining your personal situation may help fashion a severance deal that meets your needs.

Employers may seek a written release in return for a severance package. An attorney can recommend options and help assure that your rights are protected.