Employee Survival Guide® - Your Layoff Severance First Aid Kit

Episode Date: March 24, 2023

In this episode of the Employee Survival Guide, Mark prepares your layoff first aid kit and instructs you about what should go into it.  He will discuss (10) ten steps you need to run through when you receive your layoff notice and severance agreement.   Mark offers quick advice from years of handling severance negotiations for thousands of clients.  There is a method and you need understand it to maximize your financial severance gain.   The content of this website is provided for information purposes only and does not constitute legal advice nor create an attorney-client relationship.  Carey & Associates, P.C. makes no warranty, express or implied, regarding the accuracy of the information contained on this website or to any website to which it is linked to. If you enjoyed this episode of the Employee Survival Guide please like us on Facebook, Twitter and LinkedIn. We would really appreciate if you could leave a review of this podcast on your favorite podcast player such as Apple Podcasts. Leaving a review will inform other listeners you found the content on this podcast is important in the area of employment law in the United States. For more information, please contact our employment attorneys at Carey & Associates, P.C. at 203-255-4150, www.capclaw.com.

Hey, it's Mark here and welcome to the next edition of the Employee Survival Guide where I tell you as always what your employer does definitely not want you to know about and a lot more. Hey, it's Mark here and welcome back again. This episode we're going to talk about the layoff first aid kit. What do you need to put in it? What do you need to do? I thought of this episode because of the number of layoffs it's ever increasing.

Yesterday was Indeed laid off 15% of its workforce. Accenture is laying off, I believe, 20,000 people, and it's just escalating. I will say that we're very, very busy. I am taking a number of calls daily from people being laid off. I will note that it's from the tech sector, yes, but also hedge funds and financial industry. I'm starting to see a lot of financial industry companies laying people off. Not good, folks, unless you're an employment lawyer. So, but in all seriousness, what should be in your layoff first aid kit?

First, get a copy of the severance agreement from your employer and then read it. The severance agreement is going to contain, in essence, a divorce between you and your employer whereby you're going to release claims in exchange for some amount of money. non-compete, non-solicitation, and your confidentiality. You will most likely be denied a bonus if you – because some firms have this policy that if you're not at work at a certain period of time, you don't get your bonus. But the provisions are varied depending upon what company you have. But read the provisions. In essence, what it all boils down to, it takes me about 10 minutes or less to explain it to you if you call up on the phone, but read it. And it says that you release all these claims and it's obviously legalese, but nonetheless, it's black and white. You can read through it. And it says it's the full and final agreement. No agreement occurred in the oral

language before the agreement was signed is not applicable. And then you have a full deal if you accept it. And you have this if you're over the age of 40 and you have a seven-day right of revocation period to revoke it if you want to. The second aspect of the first aid kit is what is your goal? What are you going to try to do with respect to your severance negotiation? Either A, you hire an attorney like myself to explain it to you and explain the terms, but not necessarily increase the cost, but just explain the terms. I'm doing a lot of deals now where I'm basically carving out like non-competes,

non-solicitation elements, not necessarily increasing the cost. So if you want to increase the cost, that's a different avenue and obviously gets more expensive because you have to have an attorney to spend time to go through the facts and discover if you have a case or not. I would seriously begin to think about writing up your narrative of if you're choosing the second option there of trying to build legal leverage, and I'll get to that in a second. The third thing to do in your first aid kit is check your HR portal if you still have access and see if the company has a severance plan. And I talk about this often in my episodes where you have to figure out what the floor level benefit you're going to get. Companies will pay either severance under a policy or they'll pay it under a severance plan. It's a plan that's really filed with the Department of Labor in Washington, D.C. They file what's called a 5500 document.

I think it's item number 4I, if I'm not mistaken, they put down. And what it basically is is a plan that says for the number of weeks you worked, you can get up to six months and they try to cap it based upon years of service. So that's really the floor level benefit. And if you seek legal leverage to increase dollars, what you're trying to do is increase your dollars above and on top of what you get for severance benefits under the plan. All right. Number four, because I have 10 items here, sorry. Four is ask other employees what they receive in severance. People talk. It's really amazing. And so if you can get people to say what they got, it'll give you an idea of a sense of like, it's like equal pay laws,

but we don't have that for severance. It's all still confidential. But people do talk. So ask them. I should make a footnote here. When people do tell you what they got for severance after they sign the deal, they're in fact legally breaching their confidentiality of their severance agreement. But for some reason, they still want to share what they got. I heard it today on the telephone.

Somebody said that they had talked to somebody who had gotten a year and obviously that sparks someone's imagination that maybe I can get a year as well. But that's the idea. Get information, get in detail about what other people got. Number five, there's such a thing called a goodwill negotiation. I'm going to explain it in a second and then I'm going to basically downplay it. Goodwill negotiating essentially is this, where you don't want to pursue legal claims because you're concerned of cost or fear or all of the above. And you just want to see if you can get money because of your good performance. You would come up with five things of notable, recognizable efforts on your part that made the company money that you would put into a letter that you would say, listen, I'd like to increase my severance pay offer from X

dollars to some other thing. And then here's why, because I'm such a good employee. I will tell you that nine times or 10 times out of 10, the employer is going to say to you, sorry, but respectively, the agreement is what it is. Take it or leave it. So that's the – goodwill negotiations don't really work. People think about doing it all the time just because they think it will save money. But in reality, give it a shot. You can send an email. But generally, they don't work. So you got to push your employer around by coming up with some legal claims.

Number six, speaking of legal claims, what is your legal leverage position in negotiation of settlement? Do you have one? How are you going to know you have one? Can I just pause and just beat into your brain one concept? Can you begin to discover and read about what employment laws are about because if you don't, you're naive. You're naive because you're not really helping yourself to understand what you have in your possession, what's in your cards. And you maybe just go to a talk to an attorney and get a free consult because that's free, whatever. But a lot of people don't understand what they actually have. And once they're explained what they actually have,

then they're astounded actually to what can happen when you actually have knowledge about something and you can do something with it. You can actually get more money. So can everybody wake up and begin to understand the rules of engagement about their employment? It's a pet peeve of mine. People just refuse to learn about this stuff. It's all free. It's available. You can spend time on my website.

You can read all that you want about everything. That's what I tried to put out, the free information so that you get educated about what it is so that when you're sitting in the situation when you're going to ask for more money, you can quickly adapt or maybe you can actually curate your own case and make more money out of a severance transaction because you have knowledge. Knowledge is power. So back to legal leverage. I'm going to ask you to write a narrative telling me your story. Maybe it's a story of whistleblowing because you found corrupt practices at your company or you were discriminated against.

It doesn't really matter. Just come up with some legal leverage that it describes that you have a claim and then you use that claim to develop a negotiation position with your employer. position with your employer and, you know, sorry, but you have to hire an employment lawyer to kind of help you along the way. And that employment lawyer, you know, think about what your goal is here. You're not hiring the employment lawyer to file a lawsuit. That's the last thing you ever want to do. You file a lawsuit in federal court, it's going to get picked up in Google the day after. Guaranteed.

Happens all the time. State court is a little slower. But your goal here is really about just getting involved into a negotiated settlement with your employer prior to the lawsuit being filed. But you're bringing in the onslaught, the appearance of litigation to your employer because they're not going to know – they're not going to understand what your goal is. You don't have to tell them. You can bluff it. But you have to make it look like and it has to sound and talk like and walk like a legal claim.

And that has to be demonstrated by the facts of your case. Years ago, somebody said the phrase to me that you're writing for dollars. I'm not kidding. It's not what I'm doing to the case. It's actually what your facts reveal. I will help you put it together, curate it. You can help yourself to that. I have a lot of clients who actually are really good at putting their cases together. I mean, six, sometimes seven figure outcomes. No joke, folks. People actually spend the time, they understand what their situation is, and they leverage it really well to get a huge payout. It happens. So hiring an employment lawyer, hiring an employment lawyer on an hourly basis versus contingency. When you approach a lawyer

for contingency, you better be able to demonstrate you have a lot of damages. If you just financially can't afford it, I understand that happens, But the contingent lawyer is looking for damages. If you just lost your job for $150,000, well, and you lost it yesterday, you really don't have any damages unless you're able to show some type of claim. But even then, we still need damages. folks, is that giving a contingency to a lawyer at 33% generally, you might be giving away more than you need to because if your only task is really negotiating a severance deal, then you want to pay it on the hourly because that's cheaper for you because you're only going to go through the following stages. Drafting affidavit, presenting a notice of claims letter to the employer, a demand letter to the employer, and then conducting a negotiation, and then review the agreement, sign it, and be done.

Get paid. That's it. If it's happening in a couple weeks, maybe less. Hours-wise, I can't really estimate, but it's not that long. But it's a lot less costly than having a 33% contingency case. I will tell you a story, a true story. I can't include names. We were working on a matter on an hourly basis. This client wanted a contingency, didn't tell you a story, a true story, can't include names. We were working on a matter on a narrowly basis. Client wanted a contingency, didn't tell us about it. After we had prepared

the case to the complaint stage, we were at $9 million, I think, or something like that, and the value, this is a true story, the client switched, hired another lawyer, settled the matter after it was filed in court, and the lawyer didn't do anything because – the other lawyer, the new lawyer, because they used our complaint. The client made a mistake. The client actually was a lawyer. No joke. And gave away the whole thing. I'm sure it settled for a lot of money, but the lawyer gave away a lot of percentage for the lawyer on the other side. The new lawyer didn't really – I'm sorry. The new lawyer she hired didn't really do much in the way of – on top of what we had already done.

We were at the end of our process and they had settled it after maybe a month in court. That's not a long time. a month in court. That's not a long time. So back to the story is the hiring the employment lawyer on an hourly basis is cheaper for you in a severance negotiation when you're not pursuing a complaint in court. So I think I made that point. Now, eight, negotiate severance using an attorney. I'm not trying to bolster the aspects of the attorney, but we have the experience of dealing with employers all the time, any employment lawyer for that matter, versus not doing it. And it's – employers, they play hard and fast. And if you don't have an attorney there, they're going to abuse the situation. So be prepared for that if you go down that angle.

You go down that angle. But if you have an employment attorney who understands the process and has a reputation, so maybe their website looks like ours and just talks and it just oozes out employment information to you, that's the type of lawyer you want to hire and somebody with a lot of experience. Number nine, during the negotiation, you may need to file administrative complaints to bolster your case. So this means you file with the Equal Employment Opportunity Commission or the New York City Civil Rights Commission to register your complaints. It is an administrative exhaustion requirement if you have a discrimination claim. And it tells the other side that you're very serious about the matter. It's public, but it's not public. You can't search these administrative filings. It's not Google searchable.

You actually need a FOIA request consented to by both parties in order to have the release of the information. So filing may involve an agency complaints. I also use another tactic too. I take your affidavit and I stick it in the form of a federal caption complaint where it's the same fact pattern and I change the pronouns and I add complaint counts to the thing and make it turn into a lawsuit on paper. And I send it to the other side for purposes of their – of settlement purposes to make the employer understand one important thing, that the fact pattern that the client originally gave in the EEOC affidavit that was sworn or whatever affidavit we're using now appears in the federal complaint. All of the garbage that we put in there about the employer, that's embarrassing.

I'm going to tell you, folks, it's a real huge deal when the employers see this because most lawyers, you don't know this, they draft complaints that are kind of lawyerish and they're very generic. And they're not the real true hardcore narrative that a client can tell you in his or her own words what happened. Well, I maintain that same personal approach in the fact pattern because that's the drama of the story, including every little nuance of the corporate bad behavior is also included in the complaint. I use that for severance negotiation purposes and it really does wonders to help the other side consider, well, do we want this information out there in public? And so that's a leverage tool. Lastly, number 10, part of your first aid layoff kit is sign the deal after negotiating the severance agreement, exit the employment. That's how you would exit.

And then get paid. And the one final thing is don't comment about what you receive for your severance because it violates your confidentiality agreement of your settlement agreement. So say no comment. I know that other people do talk, but that's their fault, not yours. So those are your 10 top 10 things about a severance first aid layoff kit that you're going to be dealing with, and you have choices there. So hope that helps you. Good luck, and I'll talk to you soon. If you like the Employee Survival Guide,

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