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Friday, April 10, 2015

How Not To Screw Up Your Severance Negotiation: Underbidding

So you've decided to negotiate your own severance package. If you're an experienced negotiator like a salesperson or mediator, then maybe you can handle it without screwing up. But if you aren't, then you may make some big mistakes. I thought I'd talk today about one of the worst mistakes you can make: underbidding.

Let's say you're fired or laid off and you are handed a severance package for 8 weeks of severance. You don't think. You run into HR and say you won't sign unless they give you 12 weeks. Done, they say.

But then you go home and think about it. You realize that you were let go a week after you reported age discrimination. Or you take a look at who else was targeted and it's everyone who had signed a petition to get management to raise wages. You have potential claims, and that means leverage. So you go see an employment lawyer.

Normally I'd tell you that I think you have leverage to ask for more, but you did ask for more, told them what you wanted, and they gave it. Now you've come to me to see if I can ask for even more.

I can tell you right now that this employer is almost certainly not going to negotiate any further with you or me. They gave you what you asked for. As they see it, if they give more, you'll keep asking for more. You underbid. You screwed up.

Or maybe they didn't accept your number, and you go to a lawyer to try to ask for more. Even then, most employers (and their lawyers) won't start a negotiation over what you last asking price was. Underbidding can cost you.

Here's what you should have done:

  1. Take the proposed agreement home and read it carefully, and if you don't understand it take it to a lawyer.
  2. Think about what potential claims you have against the employer. Did they fail to pay overtime? Discriminate based on age, race, pregnancy, sex, national origin or other protected category? Fire you right after you objected to something they were doing that was illegal? If so, write it down and take it to a lawyer along with the agreement.
  3. Don't try to negotiate for yourself if you aren't an experienced negotiator.
  4. Don't try to negotiate when you're still in shock from being told you don't have a job, no matter how much experience you have.

If you realize you underbid, then you'll likely have to pursue your legal remedies if you want to take the matter further. Whether that's filing with EEOC or NLRB, suing or filing a wage theft claim, you have to be ready to pass on what they've offered and take your chances with a legal case if you really think you asked for too little.

Only in the most exceptional circumstances, like discovering that they let everyone over 50 go or finding a smoking gun, will you be able to bring the employer back to the table if you underbid.

"He who represents himself has a fool for a client." Abraham Lincoln.

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I appreciate your comments and general questions but this isn't the place to ask confidential legal questions. If you need an employee-side employment lawyer, try http://exchange.nela.org/findalawyer to locate one in your state.