Severance Negotiation - what is reasonable

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stockrex
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Severance Negotiation - what is reasonable

Post by stockrex » Mon Nov 25, 2019 10:43 am

Background -
20 years as parts manage at local RV place.
20 years and 3 days, gentleman was laid off saying the company is going a different direction.

Company has not come back with a severance package yet.

What is a reasonable severance package?
Would it a be good idea to hire an atty to negotiate a severance?

daheld
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Re: Severance Negotiation - what is reasonable

Post by daheld » Mon Nov 25, 2019 10:47 am

I think you're going to need to provide some more information. In particular, why would this person expect a severance?

spoco79
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Re: Severance Negotiation - what is reasonable

Post by spoco79 » Mon Nov 25, 2019 10:50 am

A week of pay and benefits per year of service would be generous.

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whodidntante
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Re: Severance Negotiation - what is reasonable

Post by whodidntante » Mon Nov 25, 2019 10:51 am

They are required to pay you for hours worked and in some states for accrued PTO.

They may offer you an additional payment in return for consideration such as:
You agree not to sue.
You agree to keep their secrets.
You return company property promptly.
You agree not to work for their mortal enemy for a time period.
You agree not to recruit former coworkers who still work for the company.
If you sign such an agreement, you should hold up your end of the bargain.

A reasonable request would be one week pay for each year of service and for a lump sum payment sufficient to fund COBRA payments for 3 to 6 months. That is in addition to any required payments like for hours worked. Any more than that is something I would characterize as generous.

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dm200
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Re: Severance Negotiation - what is reasonable

Post by dm200 » Mon Nov 25, 2019 10:57 am

stockrex wrote:
Mon Nov 25, 2019 10:43 am
Background -
20 years as parts manage at local RV place.
20 years and 3 days, gentleman was laid off saying the company is going a different direction.
Company has not come back with a severance package yet.
What is a reasonable severance package?
Would it a be good idea to hire an atty to negotiate a severance?
No knowledge or experience with getting an attorney - but I doubt it would be worth the attorney's fees.

I have been in several such "layoffs" over the decades - and received varying severance packages. I felt and feel what I received was very fair and reasonable. These were major corporate employers.

I could be wrong, but I do not think any such severance packages are required by law or regulation - except being paid for accrued but unused vacation.

Being a "local" place, in my opinion, makes a good severance package less likely.

Usually, an employer offers a severance package primarily for its own benefit. The employer, for example, does not want the former employee to say or do anything adverse about the employer. The employer also wants to prevent any kind of lawsuit from the former employee.

Severance packages often include one or two weeks pay for every year the person was employed - sometimes with a cap (say ten years in your case). They often include employer paid health insurance for a certain number of months. In return for such benefits, the employer will want some kind of signoff. One thing I might ask for is a commitment of a good reference for your future employment - and that your departure was not based on poor performance - but rather an unrelated business decision. Sometimes, an employer will provide some sort of assistance in finding a new job. Keep your ears open about that. I would also want to make sure I was eligible for unemployment benefits - and that the employer will not contest your receiving such benefits until you find employment.

Good Luck - and let us know how this works out. I am also interested in what other advice you get here.

flaccidsteele
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Re: Severance Negotiation - what is reasonable

Post by flaccidsteele » Mon Nov 25, 2019 11:01 am

stockrex wrote:
Mon Nov 25, 2019 10:43 am
Background -
20 years as parts manage at local RV place.
20 years and 3 days, gentleman was laid off saying the company is going a different direction.

Company has not come back with a severance package yet.

What is a reasonable severance package?
Would it a be good idea to hire an atty to negotiate a severance?
Consult an employment lawyer in your area

In many parts of Canada, depending on your age, difficulty of finding a similar gig, etc. you would easily get 20-24 months of severance pay in lieu of notice

https://business.financialpost.com/exec ... -severance

Good luck with your severance negotiations!

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dm200
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Re: Severance Negotiation - what is reasonable

Post by dm200 » Mon Nov 25, 2019 11:04 am

whodidntante wrote:
Mon Nov 25, 2019 10:51 am
They are required to pay you for hours worked and in some states for accrued PTO.
They may offer you an additional payment in return for consideration such as:
You agree not to sue.
You agree to keep their secrets.
You return company property promptly.
You agree not to work for their mortal enemy for a time period.
You agree not to recruit former coworkers who still work for the company.
If you sign such an agreement, you should hold up your end of the bargain.
A reasonable request would be one week pay for each year of service and for a lump sum payment sufficient to fund COBRA payments for 3 to 6 months. That is in addition to any required payments like for hours worked. Any more than that is something I would characterize as generous.
Excellent points.

It may depend on whether you get PTO (for both vacation and sick leave) or separate vacation and sick leave. When I was let go, I had separate accrued vacation and sick leave. I was always paid in full for accrued vacation. With PTO, I don;t know how this is (or must be) done.

The more things (as listed above) you agree to, the more you should receive.

The restrictions on where and for whom you can work could be a big deal for you - depending on your qualifications for employment. I might "scout out" the "mortal enemy" possibilities and how this might adversely affect you.

dcabler
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Re: Severance Negotiation - what is reasonable

Post by dcabler » Mon Nov 25, 2019 11:04 am

spoco79 wrote:
Mon Nov 25, 2019 10:50 am
A week of pay and benefits per year of service would be generous.
In my industry what you describe above is pretty common.

Bir48die
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Re: Severance Negotiation - what is reasonable

Post by Bir48die » Mon Nov 25, 2019 11:07 am

dcabler wrote:
Mon Nov 25, 2019 11:04 am
spoco79 wrote:
Mon Nov 25, 2019 10:50 am
A week of pay and benefits per year of service would be generous.
In my industry what you describe above is pretty common.
In most industries this would not happen. It happened 25 years ago.

mptfan
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Re: Severance Negotiation - what is reasonable

Post by mptfan » Mon Nov 25, 2019 11:10 am

If you work in an "at-will" employment state then you are not entitled to any severance other than upaid PTO. Also, the Fair Labor Standards Act does not require severance pay, severance pay is a matter of agreement between the employer and the employee.

https://www.dol.gov/general/topic/wages/severancepay

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Watty
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Re: Severance Negotiation - what is reasonable

Post by Watty » Mon Nov 25, 2019 11:25 am

mptfan wrote:
Mon Nov 25, 2019 11:10 am
If you work in an "at-will" employment state then you are not entitled to any severance other than upaid PTO.
At least in the US that is pretty much true but you may be entitled to advance notice of the layoff in some situations like a large layoff. Many employers will not want employees to be coming in to work when they know that they will be let go on a certain date so they may just give the the pay instead.

In some states they do not even have to pay you for the PTO you have accrued. My employer was like that and when I retired I tried to use it all up but I did a slight miscalculation so I still lost about a days pay. :twisted: That was apparently one of the reasons why they switched to PTO from traditional vacation and sick days.

The time to negotiate a severance package is if you are a top executive with a contract and you are negotiating the contract when you are first hired.

At large corporations when they have layoffs with a severance package the severance package is typically non-negotiable. The reason is that if they gave different people different severance packages then they could be sued for discrimination.
Last edited by Watty on Mon Nov 25, 2019 11:28 am, edited 1 time in total.

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8foot7
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Re: Severance Negotiation - what is reasonable

Post by 8foot7 » Mon Nov 25, 2019 11:28 am

"Negotiation" implies that both parties have something the other wants. I'm not sure in a situation where one party is being laid off that the laid-off party has much leverage to negotiate anything, assuming at-will employment, no contracts, no untoward conduct on behalf of the company etc.

I have heard one week's pay for every year of service and health insurance for some defined time - 30, 60, 90 days, maybe even six months.

I think you should generally count yourself lucky there is severance pay at all and not look a gift horse in the mouth, especially if the business is a small business with very limited resources. Pushing back too hard might result in a withdrawn offer.

gr7070
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Re: Severance Negotiation - what is reasonable

Post by gr7070 » Mon Nov 25, 2019 11:43 am

In my location and field (engineering) the most common severance is two weeks pay and benefits. Note that is total; it is not per year worked.

It would not be entirely unusual to get less than that, down to zero - from what I've seen firms laying off are hurting and looking to cut costs.

This board has a ton of folks from California and the tech industry, both location and field appear far more generous than other locations and fields. So posted norms may not apply to the OP.

Specifically for the OP zero severance would *not* surprise me and unless there's legal requirements - which commonly there is not - a lawyer would be a waste off money.

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dm200
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Re: Severance Negotiation - what is reasonable

Post by dm200 » Mon Nov 25, 2019 11:48 am

8foot7 wrote:
Mon Nov 25, 2019 11:28 am
"Negotiation" implies that both parties have something the other wants. I'm not sure in a situation where one party is being laid off that the laid-off party has much leverage to negotiate anything, assuming at-will employment, no contracts, no untoward conduct on behalf of the company etc.
I have heard one week's pay for every year of service and health insurance for some defined time - 30, 60, 90 days, maybe even six months.
I think you should generally count yourself lucky there is severance pay at all and not look a gift horse in the mouth, especially if the business is a small business with very limited resources. Pushing back too hard might result in a withdrawn offer.
Yes - I wonder about that as well.

Might or might not be relevant here - but I might (very quietly in the background) try to find out what this "change of direction" means. Perhaps, for example, they (despite denials) might be unhappy with your performance. Perhaps they just believe a replacement can be hired at a lower cost. Perhaps that specific position has been eliminated and these things will be done in a very different way.

On the two occasions where I received severance benefits, I agreed to multiple things - none of which was a big deal for me. These included agreeing not to sure the employer and, as best I recall, not to divulge any company secrets (not that I really knew any good ones). In my case, there were no restrictions on future employment.

At certain management or executive levels, it is not uncommon that such folks, while employed, negotiate the minimum terms and conditions (and receive compensation at the time) of being released/terminated from employment. I never was such a person, though.

renue74
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Re: Severance Negotiation - what is reasonable

Post by renue74 » Mon Nov 25, 2019 11:49 am

How were previous employees at this company treated? Did they get severance?

I own a small firm and when I let go of an employee, I'll typically give them 2 weeks (extra paycheck) and pay any accrued vacation/PTO time. I'll cut a check and give to them the day I let them go so they know how much they have.

hudson
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Re: Severance Negotiation - what is reasonable

Post by hudson » Mon Nov 25, 2019 11:59 am

stockrex wrote:
Mon Nov 25, 2019 10:43 am
Background -
20 years as parts manage at local RV place.
20 years and 3 days, gentleman was laid off saying the company is going a different direction.

Company has not come back with a severance package yet.

What is a reasonable severance package?
Would it a be good idea to hire an atty to negotiate a severance?
I was involved in a layoff years ago. The manager told me they were going to lay off my boss. My boss didn't show up for work that day; he called in sick. They wanted me to help them get in touch with him and get him to come in for a meeting. They also wanted me to help him take out his personal belongings. When my boss came to the meeting, a check for the severance and other benefits was waiting. The manager later called a meeting of that group of employees and told them exactly what happened and why.

From my only experience with a layoff, I would think that if the gentleman hadn't gotten a severance package yet, he would not be offered one. In my state, they can fire you at any time for any reason. No severance is required.

mptfan
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Re: Severance Negotiation - what is reasonable

Post by mptfan » Mon Nov 25, 2019 12:06 pm

gr7070 wrote:
Mon Nov 25, 2019 11:43 am
This board has a ton of folks from California and the tech industry, both location and field appear far more generous than other locations and fields. So posted norms may not apply to the OP.
This is very true. People hear stories of generous severance packages so they assume there is some requirement that an employer must provide some form of severance without realizing that the people who get severance usually work for large corporations with standardized policies regarding severance and it is provided as a benefit to protect the corporation, it is not a legal requirement. Most people do not get severance, or if they do it is something like 2-4 weeks of pay, total, not per year, regardless of the length of employment.
Last edited by mptfan on Mon Nov 25, 2019 12:11 pm, edited 1 time in total.

bob60014
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Re: Severance Negotiation - what is reasonable

Post by bob60014 » Mon Nov 25, 2019 12:09 pm

stockrex wrote:
Mon Nov 25, 2019 10:43 am
Background -
20 years as parts manage at local RV place.
Local, as in independent? Good luck.

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fizxman
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Re: Severance Negotiation - what is reasonable

Post by fizxman » Mon Nov 25, 2019 12:13 pm

I view a severance as a quid pro quo. The employer is asking things of the former employee and in return, the employer will give the employee various things. Those things, on both sides, can be negotiated.

In this case, if the employer doesn't want anything from the former employee, then the employee will not get anything. There are things the former employee may be entitled to by law like unused vacation, two weeks pay in lieu of notice, COBRA, etc but one would need to investigate as it varies by state (except COBRA I believe).

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Re: Severance Negotiation - what is reasonable

Post by MathIsMyWayr » Mon Nov 25, 2019 12:20 pm

Watty wrote:
Mon Nov 25, 2019 11:25 am
mptfan wrote:
Mon Nov 25, 2019 11:10 am
If you work in an "at-will" employment state then you are not entitled to any severance other than upaid PTO.
At least in the US that is pretty much true but you may be entitled to advance notice of the layoff in some situations like a large layoff. Many employers will not want employees to be coming in to work when they know that they will be let go on a certain date so they may just give the the pay instead.

In some states they do not even have to pay you for the PTO you have accrued. My employer was like that and when I retired I tried to use it all up but I did a slight miscalculation so I still lost about a days pay. :twisted: That was apparently one of the reasons why they switched to PTO from traditional vacation and sick days.

The time to negotiate a severance package is if you are a top executive with a contract and you are negotiating the contract when you are first hired.

At large corporations when they have layoffs with a severance package the severance package is typically non-negotiable. The reason is that if they gave different people different severance packages then they could be sued for discrimination.
Offering a severance package is not a policy, but a practice as a good will whatever it means. Unless you have a contract or is a high level executive, I doubt what leverage you may have. Parting quietly and focusing on your next move is the best

California88
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Re: Severance Negotiation - what is reasonable

Post by California88 » Mon Nov 25, 2019 12:25 pm

Unfortunately this seems to happen a lot. Remember going for my regular car service at the Honda Dealer ... the cashier ladies in the office were not there - my service rep. said "last Fri at 5p they were told not to come to work on Mon. ... that their services were no longer required"!

Luckily I worked for a mega corporation and people did get exit packages.

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dm200
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Re: Severance Negotiation - what is reasonable

Post by dm200 » Mon Nov 25, 2019 12:54 pm

Several posts related to paying or not paying PTO.

Since PTO lumps together both vacation time and sick leave, how does PTO relate to being paid at employment termination vs. separately accrued vacation and sick leave? Since, normally at least, employees are paid in full for vacation but not sick leave at termination of employment - how is PTO paid or not paid at a similar situation?

My current employer provides PTO to include time missed for either vacation or sick leave. Up to 200 hours of PTO can be carried over from one calendar year to another. Until the beginning of 2019, employees with over 200 accrued hours of PTO received payment in full for each hour over 200 at the end of the calendar year. In addition, employees could "cash in" a requested number of hours at their full current hourly rate of pay. [VERY GENEROUS IN MY OPINION!]. At the beginning of 2019, a change was made that such PTO payments would be made and 1/2 of the employee's hourly rate of pay.

Curiously as well, my employer's policy for getting and accruing PTO is that management level employees receive more PTO per pay period than non-management - actually two levels of management. Executive management gets even more PTO and just management. Those employed before 2011 continue to receive the higher PTO accrual amounts in effect at that time. I still think that the current PTO accruals are quite reasonable. In addition to PTO, employees receive (full time employees 2 hours per pay period) EIL (Extended Illness Leave) that can be used for absence due to illness where the first five days of such an illness are taken as PTO. I think that is an excellent benefit as well.

As a part time employee (20 hours a week) I do not get any benefits (not even paid holidays) except PTO and EIL. Because of the somewhat complicated nature of my being employed to this "niche" position in October 2018, my employer "grandfathered" me for PTO accrual as though I had been employed prior to 2011. Therefore, I receive 4.50 hours of PTO every payday (two weeks). That is about 117 PTO hours per year!! If I were considered a part-time "new hire" in October 2018, I would get 2.31 hours PTO per pay period (two weeks). I am very pleased that I receive the generous 4.50 hours PTO every two weeks. Working a somewhat flexible part time (20 hours a week) schedule, I have much less need for PTO - since I can almost always schedule medical and dental appointments outside work hours - and can schedule work time allowing some off days for vacation/travel. For example, this Friday (day after thanksgiving) would be a normal workday and I do not get paid for the Thursday Thanksgiving holiday. We are traveling several hours drive away - leaving late morning Thursday and coming back Saturday afternoon. I am able to do this without taking PTO by working my 20 hours this week today, tomorrow and Wednesday.

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HomerJ
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Re: Severance Negotiation - what is reasonable

Post by HomerJ » Mon Nov 25, 2019 12:59 pm

stockrex wrote:
Mon Nov 25, 2019 10:43 am
Background -
20 years as parts manage at local RV place.
20 years and 3 days, gentleman was laid off saying the company is going a different direction.

Company has not come back with a severance package yet.
Umm.. if they don't offer a severance package the day they let you go, there isn't going to be one.

Feel free to tell all co-workers how you were treated.
Would it a be good idea to hire an atty to negotiate a severance?
Do you have some dirt on the company or the owner? Can you threaten to sue them for discrimination?

We're not talking severance any more, we're talking a full fledged lawsuit, and hoping the company settles.
The J stands for Jay

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dm200
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Re: Severance Negotiation - what is reasonable

Post by dm200 » Mon Nov 25, 2019 1:08 pm

HomerJ wrote:
Mon Nov 25, 2019 12:59 pm
stockrex wrote:
Mon Nov 25, 2019 10:43 am
Background -
20 years as parts manage at local RV place.
20 years and 3 days, gentleman was laid off saying the company is going a different direction.
Company has not come back with a severance package yet.
Umm.. if they don't offer a severance package the day they let you go, there isn't going to be one.
Feel free to tell all co-workers how you were treated.
Would it a be good idea to hire an atty to negotiate a severance?
Do you have some dirt on the company or the owner? Can you threaten to sue them for discrimination?
We're not talking severance any more, we're talking a full fledged lawsuit, and hoping the company settles.
What seems to me a bit "unusual" is that the OP was notified of being terminated - but the termination has not yet happened. I wonder what might be going on then? Maybe, since this seems to be an individual RV place, the employer is not well educated, prepared and informed?

I could be wrong, but I tend to agree that if no package was offered when you received this notice, none will be offered in the future.

In just about every case of such terminations (certainly my cases), while it did not come as a great surprise - given the specific employer situations, I learned that I was being terminated only on the very day I was "walked out the door" - or equivalent. At the same time I was informed of my termination, I received the whole package - what I would receive as severance benefits - as well as the documents I would need to sign immediately in order to receive the severance benefits.

It also seems to me that "age discrimination" in your being let go could be an issue as well.

dcabler
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Re: Severance Negotiation - what is reasonable

Post by dcabler » Mon Nov 25, 2019 2:11 pm

hudson wrote:
Mon Nov 25, 2019 11:59 am
stockrex wrote:
Mon Nov 25, 2019 10:43 am
Background -
20 years as parts manage at local RV place.
20 years and 3 days, gentleman was laid off saying the company is going a different direction.

Company has not come back with a severance package yet.

What is a reasonable severance package?
Would it a be good idea to hire an atty to negotiate a severance?
I was involved in a layoff years ago. The manager told me they were going to lay off my boss. My boss didn't show up for work that day; he called in sick. They wanted me to help them get in touch with him and get him to come in for a meeting. They also wanted me to help him take out his personal belongings. When my boss came to the meeting, a check for the severance and other benefits was waiting. The manager later called a meeting of that group of employees and told them exactly what happened and why.

From my only experience with a layoff, I would think that if the gentleman hadn't gotten a severance package yet, he would not be offered one. In my state, they can fire you at any time for any reason. No severance is required.
Interesting. In my industry (semiconductor) it's usually a two step process.
1. Notification which includes a check for remaining work period + any untaken vacation.
2. At the same time as notification, presentation of a package which includes all of the details of additional benefits and notification of what a severance check would look like and how it was calculated. They usually give you a deadline to sign and turn in the paperwork and most people I've worked with (myself included) usually use most of that time period to fully understand the terms first and conditions first. Some have tried, with various amounts of success, to further negotiate the severance terms. But to be clear, this is when the severance package is usually presented, if it is to be presented at all. Once signed, they cut a check.

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Watty
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Re: Severance Negotiation - what is reasonable

Post by Watty » Mon Nov 25, 2019 2:32 pm

dm200 wrote:
Mon Nov 25, 2019 12:54 pm
Since PTO lumps together both vacation time and sick leave, how does PTO relate to being paid at employment termination vs. separately accrued vacation and sick leave? Since, normally at least, employees are paid in full for vacation but not sick leave at termination of employment - how is PTO paid or not paid at a similar situation?
It depends on the employer policy and the minimum of what is required by the state laws.

The employer I worked for was in multiple states and when you were terminated they would pay PTO in states that required it and not pay it in the states that did not require it. When there were layoffs they paid PTO as part of a modest severance package regardless of what state you were in. I am not sure but if you were fired for some reason I don't think that they paid PTO unless it was required by state law.

When they instituted that policy there was a lot of grumbling and they lost a lot of employee good will and loyalty. I would suspect that for the few bucks they saved by not paying PTO they lost a lot more in productivity.

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Re: Severance Negotiation - what is reasonable

Post by cheese_breath » Mon Nov 25, 2019 2:34 pm

daheld wrote:
Mon Nov 25, 2019 10:47 am
I think you're going to need to provide some more information. In particular, why would this person expect a severance?
+1
Is this a private dealership, franchise, part of a larger company?

Is there a written policy regarding severances?

Has the company paid into an unemployment compensation insurance program? (That might be the only severance he gets)
The surest way to know the future is when it becomes the past.

Lalamimi
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Re: Severance Negotiation - what is reasonable

Post by Lalamimi » Mon Nov 25, 2019 2:41 pm

Severance is never required. He should go file for unemployment ASAP and move on.

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dm200
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Re: Severance Negotiation - what is reasonable

Post by dm200 » Mon Nov 25, 2019 2:53 pm

Lalamimi wrote:
Mon Nov 25, 2019 2:41 pm
Severance is never required. He should go file for unemployment ASAP and move on.
I do not believe the OP has actually left the employer. I doubt he can file for unemployment until actually unemployed.

While (from the circumstances described) unlikely, it is possible the employer could contest his eligibility for unemployment, since having a former employee receiving unemployment compensation could (or would) cost the employer in unemployment taxes.

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Re: Severance Negotiation - what is reasonable

Post by Katietsu » Mon Nov 25, 2019 5:08 pm

Is it possible that the employee has poor work performance in some way and they are trying to be kind by simply stating that they want to go in a different direction. By not firing him for cause, they could be allowing him to more easily apply for unemployment and a new job.

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dm200
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Re: Severance Negotiation - what is reasonable

Post by dm200 » Mon Nov 25, 2019 5:09 pm

Katietsu wrote:
Mon Nov 25, 2019 5:08 pm
Is it possible that the employee has poor work performance in some way and they are trying to be kind by simply stating that they want to go in a different direction. By not firing him for cause, they could be allowing him to more easily apply for unemployment and a new job.
Yes - that is certainly a possibility. Or, perhaps, a similar "perception" by the employer of this.

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Nate79
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Re: Severance Negotiation - what is reasonable

Post by Nate79 » Mon Nov 25, 2019 6:07 pm

Its humerous that people think a small local RV dealership is going to pay a severance package.

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dm200
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Re: Severance Negotiation - what is reasonable

Post by dm200 » Mon Nov 25, 2019 6:51 pm

Nate79 wrote:
Mon Nov 25, 2019 6:07 pm
Its humerous that people think a small local RV dealership is going to pay a severance package.
We shall see - I hope the OP updates us.

I tend, as well, to think there will be little or no severance "package".

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Re: Severance Negotiation - what is reasonable

Post by Cosmic Pony » Mon Nov 25, 2019 7:25 pm

So sorry for your situation. It is pretty bitter when it happens but you have to keep your chin up and look ahead. I got laid off in June after 27 years of service. Was expecting maybe four to six months but got a little under two. There was clearly no negotiation, so I took it. My wife was laid off a few years ago after 8 years of service and got less than one month. She then got laid off from her next job a few months ago while carrying our insurance and got only two weeks to either COBRA or find new insurance but a month's pay. COBRA for her company plan was $2300 a month so we went to the ACA market and picked up a (crappy) plan there. Sadly, these are different times and companies want to cut the cord as quickly as possible. My wife and I view the rest of our working years as likely highly unstable and we're glad we saved aggressively for retirement. If you can get them to cut a deal on insurance, that would be huge.

Old Sage(brush)
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Re: Severance Negotiation - what is reasonable

Post by Old Sage(brush) » Mon Nov 25, 2019 9:01 pm

OP, you should get advice from an employment lawyer. Whether you have leverage to negotiate a severance package will depend in large part on what potential claims you may have from being laid off. Even if you are an employee at will, and it’s possible you’re not, a lay-off can’t be done in violation of discrimination and other labor laws. Do yourself a favor, consult a qualified attorney.

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Re: Severance Negotiation - what is reasonable

Post by Grt2bOutdoors » Mon Nov 25, 2019 9:14 pm

Nate79 wrote:
Mon Nov 25, 2019 6:07 pm
Its humerous that people think a small local RV dealership is going to pay a severance package.
There is nothing humorous about losing one's employment. The OP in reading this forum may be under the impression that it's a standard benefit in all working environments. You'd be surprised, some small shops will pay severance but that is dependent on the goodwill of the employer, not because it's required by law.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: Severance Negotiation - what is reasonable

Post by Annabel Lee » Mon Nov 25, 2019 9:32 pm

stockrex wrote:
Mon Nov 25, 2019 10:43 am
Background -
20 years as parts manage at local RV place.
20 years and 3 days, gentleman was laid off saying the company is going a different direction.

Just commenting on the proliferation of corporate horseshit, even down to the local RV dealership.

“Going in a different direction,” so they don’t need the long-time parts manager? Is the different direction that they’re no longer going to manage their parts?

Best of luck to the gentleman described by the OP. Honesty and candor really are rare gifts these days.

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ClevrChico
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Re: Severance Negotiation - what is reasonable

Post by ClevrChico » Mon Nov 25, 2019 11:01 pm

I have only seen severances while working at a megacorp, where the calculation is clearly stated with the other benefits.

At small to medium companies, I would expect nothing other than the required unemployment benefits.

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cheese_breath
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Re: Severance Negotiation - what is reasonable

Post by cheese_breath » Mon Nov 25, 2019 11:06 pm

Grt2bOutdoors wrote:
Mon Nov 25, 2019 9:14 pm
Nate79 wrote:
Mon Nov 25, 2019 6:07 pm
Its humerous that people think a small local RV dealership is going to pay a severance package.
There is nothing humorous about losing one's employment. The OP in reading this forum may be under the impression that it's a standard benefit in all working environments. You'd be surprised, some small shops will pay severance but that is dependent on the goodwill of the employer, not because it's required by law.
+1

And don't expect any goodwill from the employer if a lawyer is brought into the picture.
The surest way to know the future is when it becomes the past.

Old Sage(brush)
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Re: Severance Negotiation - what is reasonable

Post by Old Sage(brush) » Tue Nov 26, 2019 7:35 am

It may be true that bringing a lawyer into the picture would chill the negotiation and, if there was goodwill, be counterproductive. However, consulting a lawyer does not mean bringing the lawyer into the negotiations directly. OP should at least understand what his legal position is, and can then factor that into a negotiation strategy. And, if there is no “goodwill “, that is, no severance offered even after OP asks about it, then having a lawyer can be effective and necessary if OP doesn’t want to just move on. If OP is concerned that bringing a lawyer into the negotiation may become known in the community and make finding another job more difficult, that’s another consideration. On the other hand, with ageism, perhaps finding another job is unrealistic in which case there is no harm in attempting to maximize the package for layoff.

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Re: Severance Negotiation - what is reasonable

Post by RubyTuesday » Tue Nov 26, 2019 7:56 am

Sorry about your situation...

OP hasn’t returned to provide any additional context. We don’t know whether he was let go immediately or it is pending. If pending, I think he could raise the issue, but doubt seriously he will receive any consideration, unless this employer has a lot of goodwill. If it was immediate, he should not expect them to “come back” with anything other than any required COBRA notifications.

Short of suspecting age discrimination (or the potential for some other bad PR situation locally) OP unlikely has any leverage. A lawyer only makes sense if there is some leverage, otherwise it will simply squander any goodwill.

RT

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8foot7
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Re: Severance Negotiation - what is reasonable

Post by 8foot7 » Tue Nov 26, 2019 8:48 am

Old Sage(brush) wrote:
Tue Nov 26, 2019 7:35 am
It may be true that bringing a lawyer into the picture would chill the negotiation and, if there was goodwill, be counterproductive. However, consulting a lawyer does not mean bringing the lawyer into the negotiations directly. OP should at least understand what his legal position is, and can then factor that into a negotiation strategy. And, if there is no “goodwill “, that is, no severance offered even after OP asks about it, then having a lawyer can be effective and necessary if OP doesn’t want to just move on. If OP is concerned that bringing a lawyer into the negotiation may become known in the community and make finding another job more difficult, that’s another consideration. On the other hand, with ageism, perhaps finding another job is unrealistic in which case there is no harm in attempting to maximize the package for layoff.
In all likelihood the OP's legal position is, well, non-existent. I think the OP would be wise to conserve his or her funds in this instance and not worry about trying to see a lawyer. Unless OP had an employment contract calling for severance, or unless OP has a serious claim of age discrimination (not just "they want to fire the old guy" but multiple documented occurrences of specific discrimination instances), or some other obvious, documented, verifiable cause of action, I'd save the money to use on finding health insurance and spend the mental energy finding a new job.

FWIW, I owned a small business with a number of employees for years. I generally would have paid a little something letting a long-time employee go unless it was a separation "for cause." I never had a 20 year employee but I'd like to think I'd have given him a month's pay, or maybe covered his family health premium for a few months or something. But if one of my at-will employees I terminated brought a lawyer into the situation in order to "negotiate" a payout, I would not give that employee a single penny I was not legally required to give them, either through a direct payment or through extended benefits coverage.

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Re: Severance Negotiation - what is reasonable

Post by HomeStretch » Tue Nov 26, 2019 9:33 am

Sorry for your situation. Please give us an update when available.

If your employer does not provide severance, be sure to apply for unemployment benefits immediately. Also, if your employer wants to contact you after separation for questions/assistance, consider a written consulting agreement with a rate at least double your current rate.

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cheese_breath
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Re: Severance Negotiation - what is reasonable

Post by cheese_breath » Tue Nov 26, 2019 10:38 am

HomeStretch wrote:
Tue Nov 26, 2019 9:33 am
Sorry for your situation. Please give us an update when available.

If your employer does not provide severance, be sure to apply for unemployment benefits immediately. Also, if your employer wants to contact you after separation for questions/assistance, consider a written consulting agreement with a rate at least double your current rate.
Former employer... "Hi Fred. This is Joe, your former boss. Oh BTW, where do you keep the _____ parts for the RVs?"
You... "My hourly rate is $X.XX. I'll send my contract for your signature."

Obviously he won't sign it, but I bet it will make you feel good.
The surest way to know the future is when it becomes the past.

Old Sage(brush)
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Re: Severance Negotiation - what is reasonable

Post by Old Sage(brush) » Tue Nov 26, 2019 10:49 am

"In all likelihood the OP's legal position is, well, non-existent."

How could anyone know that from the information provided? That statement is just an uniformed opinion. OP, you are getting different opinions on how to proceed, you will need to decide for yourself. You have more information than we do, and for anyone to suggest you have no legal case is not good advice, when they just don't know.

Old Sage(brush)
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Re: Severance Negotiation - what is reasonable

Post by Old Sage(brush) » Tue Nov 26, 2019 10:49 am

OP: Good luck!

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dm200
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Re: Severance Negotiation - what is reasonable

Post by dm200 » Tue Nov 26, 2019 10:54 am

HomeStretch wrote:
Tue Nov 26, 2019 9:33 am
Sorry for your situation. Please give us an update when available.
If your employer does not provide severance, be sure to apply for unemployment benefits immediately. Also, if your employer wants to contact you after separation for questions/assistance, consider a written consulting agreement with a rate at least double your current rate.
Depending on all the details, as well as the applicable jurisdiction, getting a severance package or benefits would probably not exclude receiving unemployment benefits. In my case, for one such period, I did receive unemployment benefits until I found employment.

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Re: Severance Negotiation - what is reasonable

Post by MathIsMyWayr » Tue Nov 26, 2019 12:12 pm

8foot7 wrote:
Tue Nov 26, 2019 8:48 am
Old Sage(brush) wrote:
Tue Nov 26, 2019 7:35 am
It may be true that bringing a lawyer into the picture would chill the negotiation and, if there was goodwill, be counterproductive. However, consulting a lawyer does not mean bringing the lawyer into the negotiations directly. OP should at least understand what his legal position is, and can then factor that into a negotiation strategy. And, if there is no “goodwill “, that is, no severance offered even after OP asks about it, then having a lawyer can be effective and necessary if OP doesn’t want to just move on. If OP is concerned that bringing a lawyer into the negotiation may become known in the community and make finding another job more difficult, that’s another consideration. On the other hand, with ageism, perhaps finding another job is unrealistic in which case there is no harm in attempting to maximize the package for layoff.
In all likelihood the OP's legal position is, well, non-existent. I think the OP would be wise to conserve his or her funds in this instance and not worry about trying to see a lawyer. Unless OP had an employment contract calling for severance, or unless OP has a serious claim of age discrimination (not just "they want to fire the old guy" but multiple documented occurrences of specific discrimination instances), or some other obvious, documented, verifiable cause of action, I'd save the money to use on finding health insurance and spend the mental energy finding a new job.

FWIW, I owned a small business with a number of employees for years. I generally would have paid a little something letting a long-time employee go unless it was a separation "for cause." I never had a 20 year employee but I'd like to think I'd have given him a month's pay, or maybe covered his family health premium for a few months or something. But if one of my at-will employees I terminated brought a lawyer into the situation in order to "negotiate" a payout, I would not give that employee a single penny I was not legally required to give them, either through a direct payment or through extended benefits coverage.
I have always been an employee and never owned any business. I have a full sympathy for OP, but we have to be realistic. Most of employers are all about profit and I have no intention of defending them. A severance is at the discretion of an employer absent any contracts, laws/regulations, employer policy, and things related to employer reputation (employee morale, reputation in industry, black mark for recruitment, media consideration). Finally, let me turn the table around. When an employee leaves a long held job, is he expected to pay the employer?

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stockrex
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Re: Severance Negotiation - what is reasonable

Post by stockrex » Tue Nov 26, 2019 1:02 pm

Here is the update:

I appreciate all the input.

My buddy was called into a meeting room and he was shocked with the news of layoff and they pressured him to sign a termination agreement on the spot. The strong arm tactics employed by his previous employers do not pass the smell test.

I think the 20 years of goodwill was gone when they laid him off.

But much of what we are talking about might be moot as he signed a termination agreement.

He is in bit of a shock and he is still processing "what just happened" and I asked him to go over the agreement with a fine tooth comb and find his original employment agreement and read that too.

I called around and found a local Law practice that specializes in employment law, he is going reach out to the firm and see if they do a consult.

I am guessing the firm is getting rid of higher salaries to get fresh low salaried people.
I don't think in MI you run foul by hiring someone in the same position you just laid someone off saying the position is being eliminated.

I will ask him to do following:

1. Make sure he gets paid for any unused vac/sick time
2. Continuity of insurance
3. Claim MI unemployment
4. Run the terms of his termination by an atty

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Re: Severance Negotiation - what is reasonable

Post by fru-gal » Tue Nov 26, 2019 1:11 pm

OP, you should apply for unemployment insurance promptly.

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