Severance

By Rocket55DevAdmin |
This office space is filled with productivity
Shot of a group of businesspeople working in an office

You found a work-from-home routine that meets your needs, you’ve been a productive remote or hybrid employee, and you were hoping the working arrangement would become permanent. We get it. There’s tension, as you like your setup and don’t want to see it changed.

Unfortunately, many employers feel differently. According to Resume Builder, which surveyed 1,000 organizational stakeholders in 2023, 90 percent of participants say their company plans to return to the office by the end of 2024. Nearly 30 percent of those companies may threaten to fire employees who won’t comply with return-to-office mandates. This raises the question: Can you be forced to return to the office or be fired by your employer if you don’t comply? 

Your (Lack of) Legal Options

If you are concerned about returning to the office, your options are likely limited. Except in rare cases, return-to-office mandates do not qualify as harassment or discrimination, meaning an employer can require you to work in the office.

Can You be Fired for Not Returning to the Office?

In many instances, yes. Most employees in the United States work at-will, which means their employer can terminate them for any legal reason, at any time, without facing liability. If you work at-will, your company can update their terms of employment without consequences or notice, meaning they can say you must work from the office to continue your employment. 

If you have already been terminated by your employer, and think it was wrongful, read our page on wrongful termination for more information.

Can I Refuse to Return to the Office?

Employers may set their own workplace policies, including where, when and how you work. Unless your employer hired you in a role specifically designated as a remote position, you have a contract in place, or you have a disability that requires accommodation, options are limited. 

However, even with a contract, your preferred working arrangement may not be recognized by your employer unless you have a severance provision or some other type of enforcement clause that guarantees a remedy in the event of contract breach or termination. Otherwise, an employer can choose to terminate your employment and move on to a candidate who is more amenable to working in the office. 

If you have a disability, you have protections afforded to you if your state has disability protection laws, like that in Minnesota, and under the Americans with Disabilities Act. You’ll find more information in our section on Workplace Disability Discrimination.

If a return-to-office mandate impacts you negatively, you may have legal grounds to challenge your employer. Otherwise, the vast majority of U.S.-based employees are obligated to work where their employer tells them to. 

Your Non-Legal Options

Given this lack of legal options, if you want flexibility in returning to the office, you may have leverage with your employer — especially if you have rare skills and are in an industry with a job market that favors employees over employers, meaning you could have several businesses lining up to hire you if you left your company.

The general consensus among employers is that returning to the office improves productivity and profitability, and is good for company culture. On the other hand, many employers also understand the perks of working from home and have reasons to want to retain employees. As a result, many companies are taking a hybrid approach, requiring employees to return to office two to four days a week, instead of the full five. In fact, some employers are even offering benefits to help cover commuting and childcare costs to make this happen.

Instead of threatening to quit over a return-to-office mandate, you are likely better off trying to negotiate an accommodation, salary increase or one-time bonus, especially if you work in a competitive industry where your skills are in demand. Perhaps your manager can be flexible about which days you need to be in the office, or they can offer additional perks, like increased PTO or a more robust benefits package to help ease the burden and inconvenience of your increased office time.

If you’re at a business that’s experiencing healthy growth, it may also be a good time to negotiate a salary increase or one-time performance bonus. Good timing and a tactical approach are critical. If you can point to strong reviews, a diverse and invaluable skillset, and a recent list of accomplishments to justify your request, you may have leverage to position yourself for more money. You may not get the exact answer you want to hear, but your employer might give you a counteroffer that was worth all your effort.

But make sure your timing is thoughtful. If your company or industry is going through a period of layoffs, and low or no profits, this may not be the time to push for more benefits or money. 

In the end, your employer may require you to return to the office, and that, without more egregious or illegal acts, generally does not constitute discrimination or a hostile environment. But thinking creatively about how to present your situation may persuade your employer to accommodate some of your requests. 

If you feel you’ve experienced illegal action in your workplace, we encourage you to submit a Case Review Form to our firm. One of our attorneys will review your information, and you’ll receive a response from our firm in a timely manner. There is no charge for this confidential process. And, if we take your case, as a contingency-based law firm, there is no cost unless we win.

We’re here to help you navigate your lawful rights and ensure you get the treatment you deserve. Together, we can hold employers accountable and create a fairer workplace for everyone.

By Rocket55DevAdmin |

Business Woman Signing Documents Deal Concept

Most employers don’t offer severance packages to laid-off employees out of the kindness of their hearts. They do so because they’re buying something. That something may be employees’ release of any harassment or discrimination claims or promises not to solicit employers’ customers. Employers also use severance agreements to buy employees’ silence. As a result, employees are frequently barred from discussing the terms of their agreements or making disparaging remarks about their employers.

But under a Feb. 23, 2023, National Labor Relations Board (NLRB) ruling, employers can’t use severance agreements to silence laid-off or furloughed employees. Reversing a decision made under the previous administration, the board held in McLaren Macomb that requiring a laid-off employee to sign a nondisclosure and nondisparagement agreement as a condition of receiving severance benefits violates the employee’s rights under the NLRA.

Specifically, the board found that “a severance agreement is unlawful if its terms have a reasonable tendency to interfere with, restrain, or coerce employees in the exercise of their [NLRA] Section 7 rights, and that employers’ proffer of such agreements to employees is unlawful.”

Section 7 of the NLRA guarantees employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”

While that language may sound like it only applies to unionized workers, Section 7 applies to all nonmanagerial or nonsupervisory employees (except airline and railroad employees), whether in a unionized workplace or not.

Agreements Can’t ‘Preclude an Employee from Assisting Coworkers With Workplace Issues

In McLaren, 11 furloughed employees signed severance agreements that contained the following common nondisclosure and nondisparagement language that the NLRB ultimately found unlawful:

Confidentiality Agreement. The Employee acknowledges that the terms of this Agreement are confidential and agrees not to disclose them to any third person, other than spouse, or as necessary to professional advisors for the purposes of obtaining legal counsel or tax advice, or unless legally compelled to do so by a court or administrative agency of competent jurisdiction.

Nondisclosure. At all times hereafter, the Employee agrees not to make statements to Employer’s employees or to the general public which could disparage or harm the image of Employer, its parent and affiliated entities and their officers, directors, employees, agents and representatives.

The board determined that “[p]ublic statements by employees about the workplace are central to the exercise of employee rights under the Act.” Accordingly, “a severance agreement is unlawful if it precludes an employee from assisting coworkers with workplace issues concerning their employer, and from communicating with others, including a union, and the Board, about his employment.”

Not only did the board hold that such agreements were unlawful, but it also concluded that proposing provisions that restrain employees from discussing the terms of their employment or severance violates the NLRA:

Where an agreement unlawfully conditions receipt of severance benefits on the forfeiture of statutory rights, the mere proffer of the agreement itself violates the Act, because it has a reasonable tendency to interfere with or restrain the prospective exercise of Section 7 rights, both by the separating employee and those who remain employed.

What the Decision Means for Laid-Off Employees

Decisions like McLaren are the primary means through which the NLRB makes and enforces policy. As such, this case now represents the board’s official position on these provisions in severance agreements. When the board reviews similar agreements in the future, it will rely on the McLaren decision to guide its analysis, unless a court of appeals vacates the decision.

As a result, employers may have a difficult time enforcing existing severance agreements that contain nondisclosure or nondisparagement provisions like those above. If you’re a recently or soon-to-be laid-off employee and receive a proposed severance agreement, the NLRB decision is one more reason to consult with experienced employment counsel before signing anything. Understanding your rights, as well as the limits on what employers may ask of you, can be the key to negotiating and securing the best possible severance package.     

If you feel you’ve experienced illegal action in your workplace, we encourage you to submit a Case Review Form to our firm. One of our attorneys will review your information, and you’ll receive a response from our firm in a timely manner. There is no charge for this confidential process. And, if we take your case, as a contingency-based law firm, there is no cost unless we win.

We’re here to help you navigate your lawful rights and ensure you get the treatment you deserve. Together, we can hold employers accountable and create a fairer workplace for everyone.

By Rocket55DevAdmin |

GettyImages-91783116 (1)

People quit their jobs for all sorts of reasons – better opportunities, shifting priorities, or the need to escape from uninspiring, frustrating or miserable situations. Whatever motivates workers to move to greener pastures, they typically want to leave with as little drama or animosity as possible.

They also want to depart with as much financial security and as many benefits as they can. Severance packages that include compensation and other considerations on your way out the door can provide that security. Many companies offer severance when they decide to let employees go or lay them off. But when employees quit for their own reasons, are they entitled to severance? If not, is there a way for them to get severance pay and benefits anyway?

Your Employer Probably Doesn’t Owe You Severance If You Quit Your Job

Federal and state laws impose many obligations on employers regarding pay and benefits – minimum wage, overtime pay, health insurance, COBRA and sick leave, among many others. But no law in Minnesota or any other state mandates that an employer provide severance to a departing employee, whether the employee was terminated or left voluntarily.

As such, your employer owes you nothing when you quit, other than such legally required benefits – unless your employment contract, collective bargaining agreement or company policy says otherwise.

How Do You Know If Your Employer Has Any Severance Obligations?

If you signed an employment agreement, review the terms carefully; ideally, with the assistance of an experienced employment lawyer. It may provide for compensation and benefits, even if you quit, so long as you meet certain conditions, such as giving sufficient notice or if you’re leaving for specified reasons. Similarly, review any provisions in your employee handbook regarding the employee exit process and any benefits available upon separation.

Why Would Your Employer Offer You Severance If It’s Not Required?

Even if your employment agreement or company policies don’t provide for severance, and your employer, therefore, owes you nothing, you may have more leverage to negotiate a severance agreement than you realize.

While your employer may be unlikely to offer severance out of the kindness of its corporate heart when you quit, it may offer or agree to a severance package out of self-interest. If you have potential discrimination or other legal claims, your employer may offer you severance pay or other benefits in exchange for you releasing such claims. Similarly, it may be important to your employer that you refrain from commenting publicly about an allegedly toxic or problematic work environment or practices and pay you to keep quiet. Effective July 1, 2023, your employer cannot negotiate for a non-compete agreement but may offer compensation in exchange for limits to your post-employment activities.

Don’t Quit Before Consulting With an Experienced Employment Attorney

Leaving a job is no small decision, and how you end your employment relationship is just as important as why you’re doing so. Don’t assume that you can’t get severance when you quit. If you put in your notice without first consulting an employment attorney, you risk leaving more than just your office keys on the table.

If you feel you’ve experienced illegal action in your workplace, we encourage you to submit a Case Review Form to our firm. One of our attorneys will review your information, and you’ll receive a response from our firm in a timely manner. There is no charge for this confidential process. And, if we take your case, as a contingency-based law firm, there is no cost unless we win.

We’re here to help you navigate your lawful rights and ensure you get the treatment you deserve. Together, we can hold employers accountable and create a fairer workplace for everyone.

Pamela headshot

As a member of Halunen Law’s Employment Practice Group, attorney Pamela Johnson brings an impressive reputation for advocacy and achievement. Her clients benefit from her breadth of experience, stellar track record, and exceptional insight. She is particularly passionate about representing employees and strongly believes that everyone should be treated fairly, especially in the workplace. 

By Rocket55DevAdmin |

Close up of Employee termination form with pen and calculatorIf your employer has offered you a severance package as part of a Reduction in Force or RIF, you first need to understand that companies typically claim that RIFS are necessary for supposed financial reasons. In truth, though, RIFS are often used to get rid of older, more expensive employees and may constitute age discrimination. So – before you EVER accept an employer’s severance offer, it is wise to FIRST ask the following questions to determine whether you have any leverage in negotiating a better severance:

    1. Are there younger, less senior, less qualified people performing similar job functions who were not subject to the RIF?
    2. Is the reason you received for your selection for elimination suspect in some way; does the reason seem untrue because other options would make more business sense or because you have engaged in any activity, such as whistleblowing, that could make you a target in a RIF?
    3. Does the OWBPA Notice1 that was attached to your severance offer show a disproportionate number of older employees being impacted by the RIF?
    4. Does the selection criteria claimed in the OWBPA Notice make sense or is there a basis for you to challenge the criteria by comparing yourself with employees not selected and showing objectively how you were more qualified for the position?
    5. Did the employer provide preferential treatment to younger, less senior, less qualified employees who were not impacted (such as a transfer, promotion, demotion, reassignment, etc.)?

If you have reliable, objective evidence to challenge your employer’s decision to select you for a RIF, you may have leverage to get a better deal and it would make sense to contact a lawyer BEFORE you execute any severance agreement.  If you have age-related claims (or if you are a whistleblower, or suspect your employer has other illegal motives), an experienced employment lawyer can sometimes use this leverage to negotiate significantly more compensation in exchange for your agreement to release your employer from your prospective claims.

Maximizing leverage requires top notch negotiating skills and a thorough knowledge of the law.  Halunen Law knows what motivates employers to pay more because we have successfully negotiated severance agreements for over 30 years.   Our team of lawyers takes the time to gather the facts, create an action plan and demonstrate to employers why they need to pay our clients more—typically substantially more.

If you think you have leverage to challenge a severance, we encourage you to submit a Case Review Form to our firm. One of our attorneys will review your information, and you’ll receive a response from our firm in a timely manner. There is no charge for this confidential process. And, if we take your case, as a contingency-based law firm, there is no cost unless we win.

We’re here to help you navigate your lawful rights and ensure you get the treatment you deserve. Together, we can hold employers accountable and create a fairer workplace for everyone.

1Federal law requires that an employer provide employees being selected for a RIF with a disclosure that lists the names of ALL employees selected and not selected for the RIF; their job classification and their ages.  If you have not received this disclosure from your employer, you MUST request it.

Executive-level severance packages can be highly complex, with much at stake. Halunen Law’s employment attorneys have a depth of expertise and success in negotiating these sensitive cases at the highest levels. 

If you feel you’ve experienced illegal action in your workplace, we encourage you to submit a Case Review Form to our firm. One of our attorneys will review your information, and you’ll receive a response from our firm in a timely manner. There is no charge for this confidential process. And, if we take your case, as a contingency-based law firm, there is no cost unless we win.

We’re here to help you navigate your lawful rights and ensure you get the treatment you deserve. Together, we can hold employers accountable and create a fairer workplace for everyone.

By Rocket55DevAdmin |

Coming off record low unemployment rates, businesses are increasingly shedding workers across the economy, affecting employees at companies ranging from 3M to Twitter to Yankee Candle. Fortunately, the law affords laid off individuals certain rights and protections, as summarized below: 

1. Am I Entitled to Severance?

In many countries, terminated employees are entitled by law to specified amounts of severance pay. (France, for instance, requires employees be paid one fourth their monthly salary for each year of service up to ten, one third for each year beyond that.) The United States takes a different approach. With limited exceptions applicable to employees (1) covered by Employee Retirement Security Act (“ERISA”) governed severance plans provided by some, mostly larger employers as an employee benefit, (2) having an employment agreement containing contractual severance, (3) in a union shop governed by a collective bargaining agreement with such protections, and (4) over the age of 40 (discussed below), nobody is legally owed a dime in severance.

2. If I’m Offered Severance, Should I Accept It?

Although not required to do so, most employers offer those laid-off severance pay as a matter of course, in exchange for their signing a comprehensive release of legal claims arising from the employment relationship. Businesses do this for practical financial reasons, not out of the goodness of their hearts. They see severance agreements as cheap insurance against expensive lawsuits. 

Before agreeing to accept the severance being offered, it’s important to ask yourself whether co-workers spared the axe were more appropriate candidates for layoff. Did they have lower levels of ability? Shorter tenures with the company? A history of employment misconduct? In such instances, the layoff may constitute “pretext” under the law, meaning a mask for unlawful action. 

In addition, it’s important to ask a series of other questions. 

  • Did you report to management or a government agency any violations of law or breaches of contract in the period preceding your termination? If so, you may have legal claims under state and federal whistleblower protection laws, including the Minnesota Whistleblower Act.
  • Are you a member of a legally protected class of employees? The law prohibits discrimination on the basis of race, religion, gender, age, disability, national origin, sexual orientation and other characteristics. 
  • Did you recently seek time off for medical reasons or in conjunction with the birth or adoption of a child? The law provides certain protections for such individuals.
  • Were you about to vest in some right or benefit, such as eligibility to participate in a pension plan? If so, ERISA’s Section 510 may provide you with additional legal protections.

Employers sometimes use layoffs as a cover to get rid of workers who do not “fit in” with some preferred demographic, or who are seen as excessively expensive owing to medical costs. If you suspect that this happened to you, it is important to speak with an experienced employment law attorney before accepting any severance.

3. Am I Entitled to Written Notices or Severance Pay?

The federal Worker Adjustment Retraining Notification Act (“WARN Act”) requires employers provide employees at least 60 days advance notice of their termination if they are let go as a result of a plant closing or a “mass” layoff, meaning one affecting 50 or more workers. While advance notice is helpful in planning and seeking out alternative employment, the WARN Act provides no right to separation or severance pay.

The federal Older Worker Benefit Protection Act (“OWBPA”), by contrast, requires employers pay terminated employees 40 years old and above “consideration in addition to anything of value to which the individual is already entitled” as a condition of waiving age discrimination claims. In group terminations, the OWBPA requires employers provide all employees, not just older ones, a notice listing the ages both of all people laid off and those retained within the group of employees considered for layoff (the “decisional unit”). The OWBPA also requires employers to provide terminated employees 40 and older at least 21 days (45 days in group layoffs) in which to decide whether to accept or reject the offered severance. Through these measures, Congress intended to help employees make an informed decision as to whether age may have played a factor in their selection for termination. Failure to abide by the OWBPA’s notice and disclosure requirements will void any release of claims under the federal Age Discrimination in Employment Act (“ADEA”).

4. What About Health Insurance?

Most Americans obtain health insurance through their employment. Under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), employers must inform employees upon termination for any reason of their right to remain on the employer’s health insurance plan for a period of up to 18 months. This right may be exercised within 60 days of the end of employment. Under COBRA, the employee is responsible for paying both the employer and employee portions of the insurance premium, which in many cases will render the insurance unaffordable in comparison to policies available on the Affordable Healthcare Act Exchange. As part of a severance negotiation, employment attorneys are sometimes able to negotiate the employer’s payment of the full COBRA cost, in addition to additional compensation of claims where evidence of unlawfulness has been identified. 

Special Note on Age Discrimination

As a matter of practical experience, workers aged 40 and above tend to be laid off in greater numbers than their younger counterparts. This results in part from the fact that older, more tenured employees typically earn higher salaries than new or recent, generally younger hires. A financially struggling company may decide that to remain in business, it’s necessary to reduce the largest single expenditure for most businesses: payroll. This economic rationale may not fly where a targeted older worker has superior value based on skill and experience. This is easiest to quantify for commission-based sales employees, but may be the case for any number of other professions. 

Finally, some organizations select for termination older employees who reach upper managerial levels for potentially discriminatory reasons, including to make room for younger workers or meet diversity goals. The law protects not just women and racial minorities. Discrimination against white males, sometimes referred to as “reverse discrimination,” is equally unlawful. Proving discrimination is seldom easy, but if you feel you’ve been fired or demoted for a discriminatory reason, make sure to contact an employment lawyer. 

If you feel you’ve experienced illegal action in your workplace, we encourage you to submit a Case Review Form to our firm. One of our attorneys will review your information, and you’ll receive a response from our firm in a timely manner. There is no charge for this confidential process. And, if we take your case, as a contingency-based law firm, there is no cost unless we win.

We’re here to help you navigate your lawful rights and ensure you get the treatment you deserve. Together, we can hold employers accountable and create a fairer workplace for everyone.

Watch Charles’ interview on CBS News Minnesota’s Good Question segment: “What are your rights if you’re laid off?”

By Rocket55DevAdmin |

hostile-work-environment-lawyer-halunen-lawA headline story in the New York Times recently read “When Having a Baby and Losing Your Job Collide.” The article discussed the recent phenomenon of large corporations, predominantly but not exclusively in the tech and media industries, offering lavish benefits and perks to attract quality workers in a tight labor market. Escalating competition for talent required companies provide more and offer more with each passing quarter.    

Those days are apparently over.  With massive layoffs by some of the country’s top tech firms including Microsoft and Alphabet (Google’s corporate parent), affected workers are experiencing whiplash after receiving a pink slip they never expected.  According to the article, large numbers of these laid off workers, men and women alike, had recently experienced the birth of a child, a time normally filled with hope and joy, and were taking advantage of voluntarily enacted paid parental leave policies.  Employers adopted such generous benefits not out of the goodness of their hearts, but out of greed.  We know this retrospectively because these same companies appear to be targeting employees who availed themselves of paid parenting leave when implementing their layoffs.  Sorry to break the news, employees were used.  

State Laws: 

To be clear – it is not unlawful for an employer to lay off an employee who happens to be on parental leave when a company-wide layoff occurs.  However, an employer may not terminate an employee as part of a layoff because he or she is on maternity or paternity leave.  As an example, your employer may think it’s weak for a male employee to take paternity leave to help his spouse for a few months, and therefore uses a layoff to get rid of that employee.  Many states make it illegal to terminate an employee because they’ve taken maternity or paternity leave, as bonding between a newborn and a parent is a benefit to society and should be encouraged.  In these states, an employee discharged for taking time off can bring an action for damages against their employer.   By inducing an employee to sign a severance agreement containing a release of claims for a minimal amount, the employer gets litigation insurance on the cheap – saving it potentially hundreds of thousands of dollars in damages that a judge or jury might otherwise assess in a meritorious legal action. With this leverage in hand, of course employees should negotiate with their employers to get a better deal. Check these links out for additional information: 

https://www.leg.state.nv.us/App/NELIS/REL/79th2017/ExhibitDocument/OpenExhibitDocument?exhibitId=29512&fileDownloadName=0330ab266_ParentalLeaveReportMay05.pdf  

https://www.americanprogress.org/article/the-state-of-paid-family-and-medical-leave-in-the-u-s-in-2023/ 

Federal laws: 

The Pregnancy Discrimination Act (PDA) makes it illegal for employers to fire, refuse to hire, or deny a woman a promotion because she is pregnant. The law also provides that an employer must treat a pregnant woman the same way it would treat any other employee who becomes sick or temporarily disabled. If the employer provides benefits such as paid sick days or disability, it must cover pregnancy related disability and recovery from childbirth. The PDA does not guarantee job protection; it only guarantees a pregnant employee’s right to be treated the same as any other employee with a medical condition.  

The Family and Medical Leave Act (FMLA) provides for job-protected, unpaid leave of up to twelve weeks after the birth or adoption of a child. Upon return from FMLA leave, the employee must be restored to the same or a substantially equivalent position. It prohibits any form of interference with or retaliation from use of necessary leave. In order to qualify under the FMLA, you must have been employed by your employer for over one year and have worked for at least 1250 hours over the course of that previous year. The FMLA only covers employees at companies with 50 or more workers. 

So, now what? You believed your employer when it promised you an elaborate array of amazing benefits and you accepted its job offer. Then, months or years later, you take the time off promised (and encouraged), only to be followed up a termination because the company decided to “restructure” or “eliminate” or “right-size.” Note:  these terms are often code language for “let’s get rid of people we don’t want around anymore.” Typically your employer will offer you some minimal severance, like a few weeks to a few months of base pay. To repeat, they’re only doing this to buy a release from you so you can’t sue. Know your rights. As the expression goes, “Fool me once, shame on you.  Fool me twice, shame on me.” 

So, if you are in this situation, it is wise to consult with an attorney before accepting any severance. You may have leverage that will allow you to respectfully decline the relative peanuts being offered and demand more. People typically  think that the severance offers are non-negotiable. Nothing could be further from the truth. Your employer should not get the last word on how you depart company. 

If you feel you’ve experienced illegal action in your workplace, we encourage you to submit a Case Review Form to our firm. One of our attorneys will review your information, and you’ll receive a response from our firm in a timely manner. There is no charge for this confidential process. And, if we take your case, as a contingency-based law firm, there is no cost unless we win.

We’re here to help you navigate your lawful rights and ensure you get the treatment you deserve. Together, we can hold employers accountable and create a fairer workplace for everyone.

By Rocket55DevAdmin |

A new study from researchers at the University of New Hampshire and the University of Nebraska has determined that men in executive leadership positions receive over $500,000 more in severance compensation than women. The study, recently published in the Journal of Business and Psychology, examines severance packages at the executive level through a series of analyses focusing on large, publicly traded American companies.  

Researchers established that executive severance agreements, which can include benefits received by the employee upon termination “without cause,” can be susceptible to bias due to the opacity and subjectivity in how they are determined. Such ambiguity opens the door to preconceived notions and implicit biases linking gender to employment performance, personality traits, and expectations. 

Examining the Findings

Jennifer Griffith, the Morrison Fellow of Diversity at the University of New Hampshire’s Peter T. Paul College of Business and Economics, noted that in this study researchers found that “male executives are more likely than their female counterparts to be rewarded in their severance agreements when the company’s stock value increased under their leadership.” She further stated that “for women, how well the company was doing had less impact on the value of their severance package. This shows that performance is attributed to other organizational or market factors when women lead and could make it more difficult for women in executive leadership roles to demonstrate their value to the firm.” 

The study found that women executives were more likely to be undervalued, while male executives at similar ranks were more likely to be over-rewarded, regardless of company performance. Women were also found to be at a disadvantage in negotiating better severance packages and were often met with stronger opposition than men in negotiations due to preconceived notions of gender norms and beliefs. While previous studies have assessed the gender pay gap at the executive level as it relates to executive severance, this new study highlights the need for employers to take a more well-rounded assessment of compensation, and the need to pay closer attention to how the severance process can deprive certain groups of equal treatment. 

Protect yourself from gender discrimination

Halunen Law’s attorneys are experts in the matters of gender discrimination in the workplace. If you are a woman in executive leadership who is being offered a severance agreement that is not in line with your contributions to the company, you want to consult with attorneys who have this expertise. Working closely with you, we develop an approach that puts you in the strongest possible position to obtain better and equitable compensation and benefits, as well as to minimize any restrictions on your post-departure professional activities and opportunities. Halunen Law will vigorously advocate for the severance you deserve. Please contact Halunen Law or call us at (612) 605-4098 for a free consultation.

Executive-level severance packages can be highly complex, with much at stake. Halunen Law’s employment attorneys have a depth of expertise and success in negotiating these sensitive cases at the highest levels. If you are a C-suite executive facing a severance package as part of your employment termination, contact our office today for a confidential consultation. We represent clients on a contingency basis, so there is no cost unless we win.

By Rocket55DevAdmin |

Your career isn’t a game, especially if you face the unexpected, unwanted or unjustified end of your current tenure. But if your employer decides to show you the door and offers you a severance package, you’re playing a high-stakes game, whether you like it or not. As with all negotiations, hashing out a severance package involves strategy, moves and countermoves, calculating potential risks and rewards, and the desire to win.

But as the saying goes, “You can’t win if you don’t play.” 

Unfortunately, too many C-suite executives and other high-level employees take themselves out of severance negotiations by giving up. If a soon-to-be-former employer doesn’t offer a severance package, the employee may believe it’s game over and move on. If the employee receives an underwhelming severance proposal, he may not make a counteroffer, thinking he has no leverage or that pushing back will result in his losing the offer. 

In either case, failing to negotiate severance is a costly strategic blunder. To see why, apply “game theory” to severance negotiations. 

What Is ‘Game Theory’?

Game theory is a mathematical model of interactions between two rational decision-makers when they try to settle conflicts or initiate negotiations. Researchers developed it in the 1940s while trying to find solutions to zero-sum games in which only one of two participants would benefit. 

During negotiations, game theory takes many different forms and applies several models, depending on the individuals and circumstances involved. You may have heard of game theory concepts like the prisoner’s dilemma or chicken. The model most often applicable in severance negotiations is what game theory expert and author William Spaniel refers to as the “Ultimatum Game.”

The ‘Ultimatum Game’ and Severance Negotiations

Perhaps the biggest impediment that keeps otherwise business-savvy executives from engaging in severance negotiations is the belief that they have zero bargaining power. They might believe employers hold all the cards. As we previously discussed in detail, this is a costly fallacy. 

Employees are mistaken if they believe they have no leverage and that any offer from their employers is a take it or leave it proposition. As Spaniel notes, the ultimatum game shows “that a party with the exclusive right to make proposals has all of the bargaining power.”

But in severance negotiations, the employer does not have the exclusive right to make proposals. An initial offer isn’t an ultimatum. But if employees focus exclusively on their own pressures and priorities without considering their employers’ pressure points, it may seem like one. 

If your employer offers you a severance package, the business isn’t doing so out of charity or kindness. The organization wants something from you – a release of any claims you have, your agreement not to compete or your silence. That gives you leverage, which should give you the confidence to make a counteroffer if the initial offer isn’t adequate. According to Spaniel, even making a single counteroffer significantly increases an individual’s bargaining power. 

As a result, don’t presume you have no cards to play in the severance negotiation game. Don’t forfeit your opportunity to emerge with a better deal. And remember that your employer plays this game all the time; you don’t. That’s why you should work with an experienced employment lawyer who knows the tactics and strategies that can help you leave your job on a winning note. 

If you’d like to discuss a proposed severance package or need assistance with your negotiations, please contact Halunen Law or call us at (612) 605-4098 for a free consultation. 

Image Credit: Indypendenz / Shutterstock

By Rocket55DevAdmin |

Halunen Law Blog Image In a rare show of bipartisanship, the Senate passed, and the President signed into law the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (the “Act”). What are arbitration agreements, and how do they affect your employment?

Regardless of their size, many companies manage to squeeze in some sort of an arbitration provision into their employment contracts, non-competes, or even company handbooks. These arbitration clauses are often very broad, requiring employees to forgo their rights to bring any employment-related claims in courts, and forcing them to resolve claims in a private forum—arbitration. Thus, if your employer wrongfully terminates you, even if you bring a claim in court, your employer will have a right to remove your case from court into a private arbitration, where a third-party arbitrator will adjudicate your case.

Employers have utilized this scheme for decades to avoid bad publicity and sweep wrongful conduct under the rug. But this scheme will no longer work as it relates to the sexual harassment/assault claims. The Act allows victims of sexual harassment/assault to disregard the arbitration agreement and pursue their case in a civil court, thus giving them back a right to have their case adjudicated by a jury.
In any case, it is worth remembering that the Act does not force the victim to take the case to court. If the victims of sexual harassment or assault would like to have their claims resolved privately, they still have a right to submit their case to Alternative Dispute Resolution, including arbitration.

The natural question follows—if Congress recognizes how harmful the mandatory arbitration clauses are in employment sexual harassment and assault cases, should such clauses still apply to other discrimination claims? But this is a topic for a different blog.

Halunen Law’s employment law group is a team of tenacious attorneys dedicated to ensuring employee rights and protections. If you feel you’ve experienced illegal action in your workplace, we encourage you to submit a Case Review Form to our firm. One of our attorneys will review your information, and you’ll receive a response from our firm in a timely manner. There is no charge for this confidential process. And, if we take your case, as a contingency-based law firm, there is no cost unless we win.

We’re here to help you navigate your lawful rights and ensure you get the treatment you deserve. Together, we can hold employers accountable and create a fairer workplace for everyone.

By Rocket55DevAdmin |

 

severance pay when resigning halunenlaw.comYou’ve found a better opportunity. You want to take your career in a different direction. You just can’t take it anymore and need to get out ASAP.

These are a few of the many reasons people resign from their jobs, even if they don’t have a new one lined up. If you’re considering leaving your employer, you’ve likely put a lot of thought into your decision. But while you may have a good handle on why you’re resigning, you may not have given equal consideration to how you’ll do so.

That can be a costly mistake. Resigning abruptly, without an exit strategy and without speaking with an employment lawyer, could deprive you of the chance to leave with significant severance benefits. Storming out or giving notice may feel great in the short term, but the long-term implications to your finances, reputation and future opportunities may not be so exhilarating.

That’s why having a thoughtful, strategic plan for your departure is a critical prerequisite to any planned resignation.

Before breaking the news to your employer that you’re moving on, consider taking the following steps:

Think About What You Want

When you leave, what do you want to take with you other than a box of personal items from your desk? This is a particularly important question if you don’t have a job waiting for you upon your departure.

Answer these questions:

    • Do you want severance pay or the continuation of benefits and, if so, how much, for how long and in what form (e.g., a lump sum or payments over time)?
    • What are you willing to give your employer in return for a severance package? Are you prepared to forfeit any claims you may have against your employer or agree to restrictions on future employment opportunities?
    • How much does it matter to you to leave on good terms? Do you care about burning bridges or is it important that there be no hard feelings
    • Would you like to agree with your employer regarding the messaging – to colleagues, customers, and prospective employers – surrounding your departure?

Understand What You May Be Entitled To

Unless your employment contract, collective bargaining agreement, or company policy says otherwise, or your employer wrongfully terminated you for legally prohibited reasons, your employer owes you nothing when you resign. Beyond legally required items such as COBRA health insurance coverage, earned sick days, or vacation time, the organization doesn’t have to pay you weeks or months of severance pay, unearned benefits, or any other consideration.

Accordingly, if you have an employment contract, look at the terms carefully. It may provide for severance upon your departure and include conditions for receiving it, such as a specified notice period or only if you leave for certain reasons. If you received an employee handbook, review any provisions regarding the employee exit process and benefits available after separation.

If no documents or official policies provide for severance, that doesn’t mean your employer hasn’t agreed to severance packages with other employees or won’t offer you one. Even if you’re resigning, you may have more leverage to negotiate a severance agreement than you realize.

Don’t Do Anything Without Consulting An Experienced Attorney

Leaving a job is as important a career move as starting one. For C-suite executives and other high-level employees, in particular, the start and end of an employment relationship are unique opportunities to negotiate the best possible terms and maximize your compensation and benefits.

But doing so requires a full understanding of your rights and options as well as the implications of how, why, and when you resign. If you announce your departure without first consulting a lawyer, you risk forfeiting your chance to negotiate a robust severance package. Your attorney can help you develop and implement a resignation strategy that puts you in the best possible position as you move on to better things.

If you feel you’ve experienced illegal action in your workplace, we encourage you to submit a Case Review Form to our firm. One of our attorneys will review your information, and you’ll receive a response from our firm in a timely manner. There is no charge for this confidential process. And, if we take your case, as a contingency-based law firm, there is no cost unless we win.

We’re here to help you navigate your lawful rights and ensure you get the treatment you deserve. Together, we can hold employers accountable and create a fairer workplace for everyone.

Image Credit: Indypendenz / Shutterstock

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