SKLOVER ON ExecutiveLaw™

Your Severance From Employment

Just before lunch your secretary tells you to call your division's EVP. You do, and get the message that there's a meeting in his office at 2:00 pm, and that your attendance is required.

YOUR CONCERNS

Executive Employment

Executive Compensation

Executive Severance

Executive Negotiation

SPECIAL CONCERNS

SARBANES-OXLEY CLAIMS

DISCRIMINATION/HARASSMENT

FINANCIAL TRADERS & ANALYSTS

FEDERAL "WHISTLE-BLOWER" LAWSUITS

You don't know the meeting's purpose, or its other participants. Recent consultant visits suggest imminent changes to take place. Is it your job? Is this "Your Time?"

In the general area of executive employment law, the majority of our firm's work centers about employment termination. Because of the 1980s-90s era of downsizing, and because we're now in an era of what we call "continual right-sizing," the notion of seniority as a protection against job loss has become antiquated. It's just no longer operative. In its place has gradually come the realization that one's presently perceived value to a company — or perhaps to the company's senior-most management — is what keeps one employed. If job security exists at all, it lies in present "perceived value."

We counsel, assist and represent scores of executives every year going into, through and out of the severance process. It long ago came to our attention that executives on every level feel they can credibly represent themselves in matters of employment and compensation, but share a gut-level understanding that they truly need professional assistance, guidance, counsel and, perhaps, representation, when involuntary job loss takes place.

The Many Issues

The issues are many, varied and complex. In our office we maintain checklists of issues to raise, discuss and resolve, which grow continually. At present, they number 124. They are often interdependent:

What compensation will I get? When? Is it taxed? Will it be in one lump sum?

When — and how — will others be told? What reason will be given?

Are health, life, disability and other insurances to be continued? Who pays?

How long can I keep voicemail? Will I receive outplacement assistance? Reimbursement of legal expenses?

Are unvested stock options lost? How about vested but nonexercised options?

Can I maintain copies of my creative work?

Will I get a prorated share of my expected year-end bonus?

Will my pension rights be protected?

Actually, one of our primary tasks is always to give clients some sense of what they may expect in the usual, or most common, severance process. It is with great satisfaction that we hear from severance clients, after an initial consultation, that "Now, at least, I understand what's probably going to happen. That makes me feel a whole lot better." Indeed, the anticipation and appreciation of the emotional turmoil our clients experience is one of the most important things our years of severance experience has given us, and which we offer to our clients.

Our experience of counseling, assisting and representing severance clients also gives us a knowledge of the issues — and, more importantly, a knowledge of the "in's and out's" of those issues. Gradually, standards are emerging for fairness in severance matters, and our knowledge of these, as well, are of considerable value to our clients.

To our minds, severance in employment is something of a negotiated transaction: the employee receives assistance in his or her transition out of a safe environment, into an unknown, and in return, the employer receives a release of all actual or potential claims against it. This transaction, like all transactions, is best negotiated by those who best know the "business."

The Three "Secrets" to Severance Negotiation

Our fifteen years of negotiating executive severance has yielded three "secrets" about the process that are important to bear in mind:

Severance Is Survivable: First and foremost, it must be accepted and kept in mind that the process of separation from your present employer — even if it's been a lifetime employment relation — is and will be survivable. Sure, changes will take place and you may need to modify some aspects of your life, but you and your loved ones will survive the experience. And the more you keep that in mind, the easier it will be to do so. "Positivity will prevail."

Severance Is Negotiable: Second, severance is an interactive negotiation. It is rarely, if ever, a "take-it-or-leave-it" proposition. While Human Resources would like you to believe that the offer extended to you is not negotiable, that is because it is their job to do so: to get you out as "quickly, quietly and inexpensively" as possible. Your job is to do your best for youself and your family. At the very least, you owe it to yourself to determine how negotiable your severance package is. It is almost always more negotiable than people think. You just have to negotiate well.

Severance is Customizable: Third, severance requests should be geared to enhance your particular facts and circumstances, to enhance your future "perceived value" to prospective employers and/or your future financial welfare. If you are planning on taking off into your own business, surely outplacement services may be less valuable a component in your severance package than, say, the cost of those services paid to you in lieu of them. Likewise, if you're prepared and ready for retirement, additional service credited to your pension calculations may be more valuable to you than, say, an extra month of continued salary. The point is this: raise your concerns, and ask that they be recognized in the transition assistance, that is, your severance package, to be given to you in exchange for your release and waiver.

OUR BOOK: "FIRED, DOWNSIZED, OR LAID OFF"

Our Guidebook for Executive Severance has grown and been transformed into what we believe to be the "bible" for executives going through severance. In January of 2000, Henry Holt & Company published our book entitled "FIRED, DOWNSIZED, OR LAID OFF — What Your Employer Does Not Want You to Know About How to Fight Back." Set out in 46 short, easy-to-read chapters, "FIRED, DOWNSIZED, OR LAID OFF" provides each of the pointers and precautions we present to our clients all over the world who are engaged in their own severance negotiating. From the basics of negotiation to sample letters and forms. As you might imagine, we strongly suggest you consider buying this book for each of the times in the future that you (or someone you know) may be going through severance negotiating. For more info or to order, click on this link to Amazon.com.

"There comes a time in the affairs of man when he must take
the bull by the tail and face the situation."

William Claude ("W.C.") Fields

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"Someone to Stand Up With Me"™

Sklover & Donath, LLC
Ten Rockefeller Plaza
New York, NY 10020
Tel: (212) 757-5000
Email: Info@ExecutiveLaw.com