Updated on February 20, 2023
Being laid off can be a stressful experience, especially if you don't fully understand your severance package. Unfortunately, many employees sign the agreement they are given without realizing that it can be negotiable. However, taking the time to understand your severance package and determine if it can be negotiated is crucial. Doing so can ensure you receive the best possible terms and benefits during this challenging time.
When negotiating a severance package, departing employees often think they need more leverage and accept whatever their employer offers. However, this is a fallacy that employers often take advantage of. Departing employees have more power than they think. A severance agreement can serve as an insurance policy for the employer against future employment-related claims and disruptive litigation that could cost the organization significantly more financial and reputational costs than a severance package would. For example, suppose an employee has potential claims against the employer for discrimination, harassment, or wrongful termination. In that case, the employer may want to negotiate a more generous severance package that includes the employee's release and forfeiture of any potential claims against the employer.
However, employees may not be aware that they have a potential employment-related claim, as employers are unlikely to admit to illegal conduct in their reasoning for termination. This is why it's essential to consult an employment lawyer experienced in severance negotiations before agreeing to any severance package. Unlike the employee, the employer negotiates severance packages all the time and undoubtedly has an attorney to provide advice throughout the process. Having your lawyer even the playing field can help identify potential claims and pressure points to use to your advantage.
If you find yourself negotiating a severance package, don't assume you have no power. Remember that your employer may have reason to negotiate a more generous severance package. First, ensure you clearly understand what you're signing. Legal jargon can be confusing, but E-Legal AI can help. Our advanced AI technology simplifies legal jargon, so you can understand the terms clearly before you sign. Then, consult an experienced employment lawyer to help you identify potential claims and negotiate the best possible deal. By playing your cards right, you can obtain greater financial security and robust benefits that will better position you for success as you progress in your career.
E-Legal AI is an AI-powered solution designed to simplify legal jargon, so you can understand what you're getting into before you sign on the dotted line. With E-Legal AI, you can review any type of contract, including employment, separation, settlement, release, severance, purchase, rental, service agreements, or entertainment contracts. Our advanced AI technology helps you understand the terms clearly before signing, saving time and money, and reducing the risk of legal disputes. So don't get caught signing something you wish you hadn't; let E-Legal AI be your superhero. Upload your document, let E-Legal AI work magic, and receive your simplified contract via email.