Negotiating Severance: What is the Secret?

The Secret to Negotiating Severance IS....

Understanding leverage and plain old human nature. Allow me to explain.

Is it Better to be Feared or Loved When Negotiating?

In the Prince, Machiavelli famously declared, "Better to be feared than loved, if you cannot be both." 

Gentle Outside - Steely Inside

Napoleon made famous the expression "one must rule with an iron fist in a velvet glove."

J. Paul Getty said, “You must never try to make all the money that’s in a deal. Let the other fellow make some money too, because if you have a reputation for always making all the money, you won’t have many deals.”

This Man Knows

In his book, "Getting More" Stuart Diamond, currently a Professor at the Wharton School and formerly a Pulitzer Prize–winning reporter for the New York Times - and a man who has perhaps studied negotiating tactics more than anyone alive - concludes that the outcome of any negotiation is based 90% on the people/personalities involved, and only 10%  on the substance of the subject(s) of the negotiations.

I tend to agree with every one of these maxims.

NOTE:  This Post is directed to employees who do not have a right to severance pursuant to a contract or law.  Click Here to see if you fit into such a category.  Assuming you are part of the great majority of employees who do not have a right to severance, please read on.

 A Pennsylvania Employment Lawyer's Guide to Severance Negotiations

In my experience, there does not exist a single, perfect way to approach and succeed in every severance negotiation. Why?

No Recipe

Well, Betty Crocker has never written a recipe for how to negotiate severance that I can follow with guarantee of the perfect severance cake.

No Formula

Albert Einstein never discovered a perfect mathematical equation for "solving" negotiations that I can apply with certain, predictable outcome.  

Even so, in my experience there exist certain common denominators and ingredients in most severance negotiations in which I have been involved (i.e. in which the departing employee hired me to assist in sweetening and concluding the deal).

So, that is a good place to start - do I need or should I hire an attorney?

First Consideration:  When Should I Hire a Lawyer to Help Me Negotiate Severance?

★  if an employee has engaged in prolonged negotiations before obtaining counsel, the attorney's chances are diminished.  THINK: Positions Entrenched.  So, unless you feel you have a close relationship with the person in the company who can pull the purse strings, negotiation through HR and the like is usually counterproductive;

★  lawyers deal with civil/human rights, true, but in the end the legal world is a matter of commerce. Hence, when attorneys negotiate, emotions are removed. We seek certainty via finality (i.e. a signed Separation Agreement), and we know how to achieve that end;

★  for the foregoing reasons, it is in my view best to hire an attorney right after you receive the company's proposal, as opposed to after you have gone back and forth and been told, "For the last time, this is it."

Second Consideration:  What Type of Leverage Do I Have?

★  I will recommend that my client walk away from a paltry or even substantial severance offer if he/she has adequate leverage; I will not if he/ she does not;

★  what is "adequate leverage?" Facts that strongly suggest the employee's termination was unlawful or that he/she is owed substantial wages/commissions. Truth is, sad to say, that your diligent and faithful past services (for your now former employer) neither create nor equate to "adequate leverage." Hard to accept, but undoubtedly true...The relationship is over, and you are down to brass tacks;

It Worked For Mr. Getty

★  how does one know if he/she has "adequate leverage" or, more succinctly, how do I know if I have a strong legal claim for discrimination, etc. or unpaid wages? Only an experienced employment lawyer can answer such questions, and he/she can do so only after sitting down with you to go over the circumstances of your employment in detail;

★  if you have "adequate leverage," you hold the cards. Now all you need is a lawyer that can play'em -and not over play them. Old proverb: "Pigs get fed, hogs get slaughtered." 

Remember, the goal is finality, not decisive victory. I believe Mr. Getty would agree.

What Should I Look for When Hiring a Lawyer to Negotiate My Severance Package?

Leverage or not, here are what I believe to be the keys to achieving positive results in severance negotiations:

◆  Your lawyer must KNOW employment law;

◆  Your lawyer must have a reputation for honesty;

◆  Your lawyer must be someone who has sued companies, and won;

◆  Your lawyer has to be respected and must respect other lawyers;

◆  Your lawyer must understand the law of commerce and the Rule of the Hog;

◆  Your lawyer must play well with others.

Fear > Love

The final point may be the key to success.  After all, isn't it safe to say that people who like their negotiating counterpart will be more given to generosity?  It follows, then that if the lawyer with whom I am negotiating likes me, I have a better chance of achieving a positive result when negotiating severance for my client.

Of course, having a reputation as a ferocious litigator doesn't hurt either. Machiavelli said so.

John A. Gallagher is an employment lawyer who represents employees in Pennsylvania.

  

John also has referral arrangements with attorneys skilled in representing employees throughout the United States. Click Here to request a referral.

Click Here if you have questions about any aspect of employment law, from wrongful termination, to wage and overtime claims, to discrimination and retaliation laws, to Family and Medical Leave…

Click Here if you have questions about any aspect of Pennsylvania Unemployment Law, from willful misconduct, to voluntary quit, to Referee Hearings, to severance issues…

Click Here to e-mail John directly.

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