DISCLAIMER: This post gives a general overview of employee termination and severance agreements. It is not legal advice, and I am not your attorney. If you require information or advice applied to your unique situation, please make an appointment to discuss it with an employment attorney in your jurisdiction.
Navigating the delicate process of fair severance negotiations is a challenging task that often involves complex emotions and strategic considerations. For both employers and employees, there are emotional impacts and potential legal implications. In this blog past, I delve into the considerations that can help organizations negotiate fair severance packages while minimizing the risk of legal challenges.
Make the Seven Choices
Before delivering the layoff notices, or having fair severance package negotiations, the Seven Choices from my book, DIY Conflict Resolution will help you work through natural human responses you are having:
- Forgive yourself. If you’ve done your due diligence, you can rest assured that you have done everything you can under the circumstances.
- Acknowledge yourself. To avoid laying off your employees, you presumably tried many potential solutions. Remind yourself of the efforts taken.
- Forgive the world. From pandemics and wars to explosive success, life will deliver us leaning opportunities.
- Free the emotions. Allow yourself to feel whatever you do. If you need to go to a private place to yell, cry, or drop a series of f* bombs, do it in a way that keeps other from being harmed.
- Clear your mind. Go into the fair severance package negotiations with a beginner’s mind, willing to hear what the affected employees want and need.
- Assume nothing. Ask a lot of questions to gain a deep understanding of what the affected employees need under their individual circumstances.
- Listen with your third ear. Add nothing when listening to employees’ fears, concerns. and worries. Just absorb them, until you can take appropriate action.
Consult Legal Experts
Engage employment attorneys who specialize in risk management during layoffs. Their expertise can guide you in navigating legal complexities, ensuring compliance with relevant regulations, and minimizing the risk of lawsuits.
Mitigate Legal Risks
Among the issues you will discuss with legal counsel to help you prepare fair severance packages are:
Disparate Impact Assessment
Assess the impact of layoffs on individuals in protected classes to avoid unintentional discrimination. To demonstrate your fair process, document the objective criteria used for selection of employees to be laid off.
WARN Notices
For New York employers with 50 or more employees, the WARN Act requires 90 days notice of a workforce reduction. Even if you are not required to give the 90-day notice, advanced notice to affected employees will help you build a culture of trust among your remaining employees.
Other Notices
Fulfill obligations related to unemployment and COBRA (Consolidated Omnibus Budget Reconciliation Act) benefits by providing necessary information promptly. Clear communication about these aspects helps alleviate concerns and potential legal actions.
Frame Layoffs Objectively
The decision to implement layoffs may feel like a failure to management, and in some ways it usually is. This is why it’s essential to offer a fair severance package to the employees who had less control over the decisions yet experience most of the impact. You don’t need to dwell on missteps, but you need to take responsibility for management’s role.
In the end, layoffs are the result of a strategic decision based on objective criteria. However, that decision is still made by managers or executives typically protected from the impact. The life disruption is mostly felt by employees who have presumably been loyal contributors following your lead. If they hadn’t been, you would have terminated their employment for cause.
Treat the employees losing their jobs with the respect and kindness they deserve under these difficult circumstances:
- To the extent you can, clearly communicate the rationale behind the layoffs.
- Explain the need for the business’ stability and future success.
- Listen with your third ear for the hurts you can heal, and heal the ones you can.
- Answer their specific questions, guiding them to their next steps.
- Offer transitional support.
Emphasize Compassion and Understanding
Initiating layoffs and negotiating fair severance packages can be emotionally charged for everyone involved. From the impacted employees to the management team, recognizing the human aspect of these decisions is crucial. Do this by:
- Communicating with empathy
- Providing support resources
- Ensuring the dialogue is transparent and kind
If you are delivering the news to several employees, take breaks between them and make the Seven Choices as often as necessary. Each person’s story will be as different as they are, and you will need to work through the vicarious trauma so you don’t make promises you can’t keep or say things you will later regret.
Offer Transitional Support
In addition to a fair severance package, consider providing transitional support such as career coaching, resume-building assistance, or access to job placement resources. This not only enhances the employee experience but also demonstrates a commitment to helping them navigate the next steps in their careers.
Conclusion
Negotiating fair severance packages is a critical responsibility for employers during challenging times. By approaching the process with empathy, transparency, and a focus on everyone moving forward powerfully, organizations can foster a smoother transition for both departing employees and the remaining workforce. While the emotional impact may be significant, a compassionate and legally compliant approach ensures that the organization can navigate these difficult decisions with integrity and fairness.