Why Severance Exists

SPEAKER_00 0:18

Hey, it's Mark, and welcome back to the Employee Survival Guide, where I tell you what your employer does not want you to know about and a lot more, of course. Today's topic, that severance check, is the price of your lawsuit. It just walked you out, or they are about to do that, and s or in somebody from HR put a packet in your hands and said, This is our standard package, take it or leave it. You have until Friday to accept. I want you to hear the sentence they are not saying. They are not paying you because they are generous. They are not paying you because of your years of service. They are buying a release of your claims, legal claims. That check is the price of your lawsuit they want to avoid. Once you sign it, the claims you did not even know are gone. Here's what your employer knows that you do not. Over ninety percent of you are at will. In an at-will world, they can fire you tomorrow and owe you nothing. So why does the packet exist? You probably asked yourself that question. Because

Fear Is Your Leverage

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employers are afraid. Let me repeat that. Employers are afraid of you. Now, should I repeat it a third time? Because employers are afraid of you, what you can do. You don't see it through my lens in the world. You just hear what the uh employer wants you to hear. So I write that I wrote long ago that employers are afraid. They pay severance out of fear of getting sued. I mean, I've been in business for nearly 30 years, so this is all I do. I threaten lawsuits for against employers because employers are concerned, you know, it's it's like on the policeman trying to police their bad acts until they get caught, you know, the hand in the cookie jar. Fear is your leverage. You need to understand that. It's not gratitude they're paying severance for. It's not your loyalty for all those years you served your employer. It's plain and simple fear. And the other component of fear, it's shame. Learn the language of shaming your employer for the shit that they created. Not you, they did it to you. They're responsible. Most people try to negotiate these uh severance themselves. I watched that for a long time. The company says this is a one-time offer. The employee takes two weeks of pay and a confidentiality clause that muzzles their accountant, their spouse, and their lawyer. That is not a negotiation, that's a surrender. Don't do that. So let me unpack the paper for you.

ERISA Plans Change The Floor

SPEAKER_00 2:48

First, if if this is even a gift or is it a plan, some companies run severance through an ERISA plan that's called the Employee Retirement Income Security Act. I do the area work, it's not complicated, it's just a plan benefit. If they do it, the plan document is the floor and not the ceiling of the severance you're going to get. You have the right to appeal your denial of benefits, etc. So when you're at the meeting, ask the question in writing, is the severance plant paid under an ERISA plan? Send me the plan document if it does. If they freeze and react to your question, that's information. It indicates that you are aware of more information than that you would probably have uh painted yourself out to to exist in your employer. So it means that you understand, or at least have the basic understanding that an ERISA plan exists or you know how to ask for it, or that even you have talked to an employment lawyer like me, because I've infected you with that phrase, the acronym E-R-I-S-A. Anyhow.

What The Release Really Sells

SPEAKER_00 3:51

Number two, what are they buying? A general lease. Every discrimination claim, every wage claim, every whistleblower theory you have not yet named, you know, probably don't even know exists. In exchange, you get money, and sometimes Cobra help, you know, that Cobra benefit issue. By the way, footnote, you know, go on the Obama exchanges, you know, not touting that issue, but you probably get a cheaper rate there. Uh and sometimes a reference that says you were employed from the company from so-and-so dates. So that's another benefit you get when you've signed the deal. If you want more money, you need a legal claim. Face it, without a claim, you're asking them to be nice. This is nice is not a strategy. All employers understand is, you know, hitting them across the head, or I use the uh, you know, the baseball bat with uh some nails attached to it, maybe some spikes, you know. Get the get the image of that. So it really works. Because employers are big-headed, strong headed, they they're stubborn. You you gotta make a move.

Hidden Traps In The Packet

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Three, the traps inside the packet. Well, confidentiality that is wider than you are than you imagined. A clawback that gets the money back from you when you uh say the wrong sentence at a barbecue. By the way, when you get a severance, just shut up, okay? Just don't talk. Just, you know, don't don't make a mistake. A non-compete is usually buried in the uh severance agreement. Uh you never had one before, but now you have one. Cooperation clause that makes you their free witness for the next three years. Don't do that. Always want to get paid for your cooperation and limit it to like a very short time, like like three weeks, a month. A short deadline designed to panic you into signing before you talk to anyone, like me, an employment lawyer. You want to basically avoid that. If you are 40 and older, federal law gives you a little more time to look at the paper. Use the time, don't donate it to

The First 48 Hours

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the employer. Here's what you do in the first 48 hours. Take the packet home, look at it. Do not sign it in the conference room. Write down what they said to you when they handed you to you, who said it, what happened, and go back the next six months before they uh decided to give it to you. Do not vent on the company email system after you get this. Do not post about it. Do not do anything. Do not resign because they asked you to resign. That actually does happen, so just be careful. Resignation is actually cheaper because you they don't pay your own employment benefits because you know quitting it doesn't get you benefits. Then get the uh the packet in front of an employment lawyer like myself, not your neighbor who does real estate closings, an employment lawyer like me. There is a direct correlation between having an employment lawyer on the paper and then and the number they they offered you, having it go up in terms of value, meaning more money. We also cut out the one-sided pieces, uh the terms that exist in these uh one-sided deals. We make it more mutual, like a mutual release, a mutual confidentiality, a cooperation clause, or you know, removing the non-compete uh that's not in confidentiality gags that uh gags your family. So you can oftentimes you know work with the health insurance issue as well in the severance agreement. You can ask for a lump sum instead of a salary continuation. Uh you can ask for mutual non-disparagement, means they can't say anything bad about you. Uh, you can ask for them to pay your legal fees, although that's very uncommon for the employer to

How Lawyers Raise The Number

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do that. Uh for higher level executives, that actually does happen. What not to do is treat the first number as the last number. A lot of people do that. They get freaked out, they they stomach pains, whatever. It's just like the anxiety. Don't don't sign it just because you're tired. Tired is the point. They want to beat you down, uh, they want to basically exhaust you. Just take a pause, okay? The packet is not a favor. It the severance package is a purchase order for your silence. Read it, understand it, understand what it does. Listen to this podcast, because I talk a lot about it. So they tell you it's a standard package, usually means, you know, what does it mean? There is no standard package. It means the number they can live with without you suing them. It's not a market price, there was no market price. It's not a formula based on years of a service, although that's sometimes

The Standard Package Myth

SPEAKER_00 8:04

iris a claim. Plan benefits do set it up that way and cap it, usually at six months. Years of service is a story they tell you to make the first number feel official. The real formula is how expensive are you not to sign that deal? Like what's your price? So this entire podcast, I can tell you, it's it's all about finding out what your price is, you know, your leverage, you know, what you're worth. I mean, you gotta you have some value here, and it's much higher than you think it is. That's why I tell you the uh the the chronology, the narrative matters before the math. It's it's bewildering to understand that most people don't think about that those facts that led up to, you know, they think about the emotions,

Build Your Narrative Before Math

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but it's your facts. That's why I've just been beating a a drum on the facts in nailing down your narrative that that what happened in a year before your meeting? What was the leave request? Did you file a complaint? What were the age-related comments? What about a review that flipped around like you know, uh, you know, you didn't expect it? Wage issues, not getting paid overtime. You know, what if you're a computer person working on AI and you know you don't really fit into the exemption category? Uh non-compete that they want to add. Those facts change the price. Without them, you are haggling over a courtesy, and courtesies don't do anything. They, you know, people try to say, well, I can negotiate my goodwill. Like, good luck, it's not going to work. But they say the offer expires Friday, put the expiration in your notes and keep reading.

Panic Deadlines And Age 40+

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Panic deadlines are a tactic. You need to understand that. If you are 40 or over, you have more time than uh than Friday, whether they like it or not. So take the time. If you have a Cobra issue or the laptop, the last paycheck becomes the reason you had to assign a battery release, avoid those things. Severance negotiation is a process you need to go through and you need to think logically, you need to think strategically, you need to gather your facts, you need to talk to an employment lawyer, you need to listen to a podcast or two about this. There's ways to deal with an employer, but understand one fundamental issue. Employers

Employers Want The Deal More

SPEAKER_00 10:15

want the deal more than you do, and I can't repeat that enough. They fear that you might do something, you might expose them, they might have to do some marketing triage to deal with the what you're about to disclose. We produce podcasts, episodes that you never hear about. That's not a not a joke. I produce podcasts for these cases based upon sworn statements by clients, and we send it to the employers for them to listen to the the narrative that is based upon their affidavit. I mean, pretty creative. So, you know, when people listen to this stuff, uh they react. When the people who are the decision makers who engage in the bad acts listen to their story on in audio, it's and I don't do the video, but the audio. It it it changes things. It makes uh the business folks decide, hmm, shit, I got a we got a problem. We got a real problem.

Final Warning Before You Sign

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So don't sign it, okay? Look what you got in your hand before you do it. Evaluate it. Figure out whether you have something. If you have something, go, you know, stick them, stick the employer in. It's a private negotiation. No one's gonna know except for you and them. So with that said, thank you for letting me be service. Have a great week.