update: what kind of severance package should I try to negotiate?

by Alison Green on December 11, 2016

Remember the letter-writer in October wondering what to try to negotiate for severance? (#5 at the link) Here’s the update.

To preface, the reason I was concerned about negotiating was because this company had pulled a severance offer from the person they let go before me when she tried to negotiate for a few more weeks. They had initially let her go stating financial reasons but then pulled the severance offer, stating performance reasons. It gets better though, as they never responded to her follow-up inquiries to tell her they were pulling the offer. After about a month, they received a letter from her attorney asking for a simple response. I honestly am not sure if they ever did repsond.

Fast forward a few months, and I was told that due to financial difficulties they were letting me go and I would receive any accrued time off and a two week severance. I agreed to stay a few days to help tie up some loose ends. The day after I submitted the question to AAM, my boss approached me to tell me that after looking at the numbers they would not be able to afford pay me any severance after all. At that point I felt it was pointless to try to negotiate extended benefits or basically anything else if they were that financially unstable. The boss did offer to provide a letter of recommendation to aid in my job search and seemed sincerely upset by all of it.

I took a few weeks before starting my job search before sending an email asking for the letter of recommendation. No response. A week later I inquired again, nothing. Finally I sent a text message and received the response that at this time they would only verify my employment. Needless to say, I was disappointed and left wondering what had changed. I pressed further to find out what happened and received a response about finding loose ends and something being left unfinished. Well, yes, that is what typically happens when you let someone go, there is work left incomplete.

At that point, I almost let it go but then realized that letter of reference would be helpful in explaining my lapse in employment to potential employers. I sent a follow-up telling my former boss I was disappointed to hear of the decision to no longer provide the letter, considering my performance was never in question or the reason for being let go and that I felt it was unfair to disregard my positive accomplishments based on findings after I left that I couldn’t defend or explain. Talk about deja vu, there was definitely a pattern. I must have pleaded my case appropriately, as soon after I received a very nice letter to have on hand during my search for new employment.

I suppose the lesson learned here is for anyone that is being let go/laid off for reasons that are not based on performance, if you can get a letter of recommendation to do so BEFORE your last day, as unfortunately the blame seems to land on the last guy in the chair and you’ll no longer be there to defend yourself. As for the initial question of how to negotiate a severance package, I will hopefully never have to deal with that again.

Finally, I came across a post about what to do when you find yourself unexpectedly unemployed. From my current experience (I am on week 3), if you can financially afford to take some time to regroup then definitely do it. I was eligible for unemployment and it helped to cushion the change in income so I am able to take the time. It took me a while to get out of the 8 to 5 routine and to stop freaking out about the fact that I was unemployed to appreciate the fact that I can now figure out what the next step is. I was always wanting to do something different but had a demanding job and by the time I put in the hours at work I was mentally too tired to do anything else. I feel like I hadn’t had time to breathe, it’s definitely been a blessing in disguise.

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  1. Nate*

    What an ordeal for you. Glad you are finding the silver lining.

    Whenever we offer severance, it comes with a contract. If this were to happen to anyone else, I would ask for a signed offer of severance.

    1. LeRainDrop*

      Same, my firm handled this with a written separation agreement, though it sounds like the LW’s office was so small and poorly run that I’m not surprised they didn’t do this. It’s really crappy of them to pull the severance offer from the LW after promising it to her and after she agreed to stay on working a few extra days to help tie up some loose ends or pass on responsibilities. This is not legal advice, but it seems to me a good lawyer could argue that there was an oral contract, or at least an implied contract, that she would stay those days in exchange for the severance pay, and she fully performed on her side of the bargain, whereas the employer has breached. In any event, I am very glad to hear that the LW is moving on and taking care of herself.

    2. Joseph*

      Whenever we offer severance, it comes with a contract.
      I think almost all companies do have a contract/agreement (even the horrible ones!), primarily for the *company’s* protection, not yours.
      Severance agreements/contracts are legal documents used to help the company protect themselves from a pissed-off ex-employee via a promise not to sue, a promise not to steal employees, and so on. In essence, they’re basically paying you severance as an incentive for you to go quietly.

  2. Junior Dev*

    Alison, do you agree with the advice to get a letter of reference? I think you’ve said they aren’t as important as people think they are in the past–do you think this LW’s circumstances are an exception?

    I’ve had a couple bosses offer to write me a letter (I’ve said no so far) and I wonder if this is one of those things where different hiring managers have different opinions. But even if someone was generally anti-letter I can see a company with mass layoffs being an exception.

    1. Ask a Manager* Post author

      In 99% of situations, letters aren’t useful (with the exception of academia and some branches of law, apparently). They don’t really carry weight with most employers, who want to actually talk to references, ask questions, ask follow-up questions, etc.

      But they could potentially be useful in a situation where you need to verify the terms you left on and don’t trust the old employer to tell the truth later on or to respond to reference-checkers. Even then, they’re of limited utility, but better than nothing.

      1. Cally*

        I imagine that this is probably a cultural/regional thing. In my area, letters of recommendation are highly valued and most people ask for one when they quit. I think it might have something to do with laziness of managers who figure if they get a letter then they don’t need to bother with phone calls… in interviews they always seem relieved when I have letters of recommendation attached to my list of references.

        Even when there is a bad reference coming your way, I’ve seen employers providing a letter confirming only the details of your employment and closing with a request for the interviewer to call if they wish for a reference for performance. I almost feel like that should be a requirement when someone resigns to avoid any conflicting information in future references.

        I know that getting a letter of recommendation really helped my sister. Her interviewer had her glowing letter but called the employer just to confirm, he could only speak to a manger that had hated my sister. This manager told the interviewer that my sister was insubordinate and was terminated for constant tardiness – statements that were in extreme conflict with the recommendation letter. After confirming the letter writer had worked for the company and had directly managed my sister, the interviewer completely ignored the reference call – without the letter he would have thrown my sister’s application in the trash. He was also able to inform my sister that this manager was slandering her name in references which spurred my sister to contact the owner of her former workplace to have the manager reprimanded.

          1. De*

            In Germany, letters of recommendation are what we keep from past jobs and use for job searching. I have never heard about reference calls being done here at all.

      2. TeacherNerd*

        Yes, these letters of recommendation tend to be necessary within education, but the level of education and particular school can vary in terms of how much emphasis is placed on them. It can be a real Catch-22; I couldn’t get a second glance until I had a letter of recommendation, which I could’t get until I had a (teaching) job. Then I’d be asked why I couldn’t find a teaching job. It was rather frustrating. That said, at least within education, sometimes official observations can be submitted in lieu of letters of recommendation.

        (It took me eight years to even get part-time job teaching high school, but once I got that job, even though the position turned into a one-year, part-time position, I was able to get a letter of recommendation, and behold, 13 job interviews materialized. Part of the frustration was that I’d had many jobs before I went to college – I was 27 when I started, and 31 when I graduated – so it’s not like I’d been unemployed / unemployable in the past, and/or that I was a professionally inexperienced 22-year-old. All those job applications required I attach something I didn’t have because I couldn’t find a job. Something from my student teaching days would have been acceptable…but of course that had been more than five years previously, and in some cases, those letters would have needed to be more recent. My college teaching experience also didn’t “count,” by the way. The whole process was a giant Catch-22.)

      3. Joseph*

        I think the theory here is just that since the company handled it so poorly now, it’s basically insurance against them changing their mind or pulling the “We only confirm employment dates” card. So OP wouldn’t provide the letter of recommendation instead of contact info, but right along with it.

    1. Turtle Candle*

      Yes! I’m glad the LW got their letter, but the sheer temerity of laying someone off and then whining that they had left “loose ends” is making me see red on their behalf. Of course if you cut someone’s position, they will no longer be doing the work they once did, and work they were in the middle of might not get finished. That is the cost of getting rid of them!

      That said, LW, you sound well shut of the place and I wish you the best in your next step.

      1. KG, Ph.D.*

        To be fair, there are situations in which that complaint would be reasonable. Like, hey, after we laid you off for budgetary reasons, we discovered that you hadn’t been processing vendor payments for 6 months, despite it being a major part of your job. There are totally valid reasons you might revoke a promised letter of recommendation because you made a discovery after someone was fired. However, since no details were given and the company has a history of crappy behavior related to layoffs (and since they caved on the letter of rec), that’s pretty clearly not the case here.

    2. paul*

      Yeah, that company seems like a real piece of work! jerking their people around like that is just infuriating.

  5. LeRainDrop*

    I want to touch on the last point about collecting unemployment pay. Here, the LW makes it sound like she’s collecting the money but is taking a breather to think about what she wants to do rather than immediately applying for jobs. Is that legitimate in some jurisdictions? I know that in my state, one requirement of claiming unemployment pay is that you MUST be actively looking for work AND you must submit a weekly work search record identifying AT LEAST three NEW contacts per week, specifying in the record things like employer name, phone, address, contact person name, date of contact, method of contact, whether a resume was submitted, position applied for, and the results of that contact. Yes, it’s possible to half-ass the job search, but it’s not possible to no-ass it and still legally collect the payment.

      1. LeRainDrop*

        I guess maybe, but that’s what she implied when she wrote, “I was eligible for unemployment and it helped to cushion the change in income so I am able to take the time.”

    2. LawCat*

      I think this varies by state. In my state, you have to be ready, willing, and able to work and be looking for work, but there’s not some minimum number of contacts or applications.

      When I was unemployed, even diligent job searching didn’t equate close to working full time.

      1. Liane*

        In my state you only need 3 job contacts/week and the definition is *very* liberal; simply walking in & asking if they’re hiring and being referred to the website is a contact, so if you go to the site, that’s 2 of your 3. Between that and how slowly the hiring processes are at most places, I can get in a bunch of job contacts and still have plenty of downtime.

    3. LGH*

      They may be applying, but really considering other lines of work, etc and using this time to focus on other options.

      Either way, I think we should assume LW is following all rules in their area unless they state otherwise.

        1. LeRainDrop*

          Sorry, my point wasn’t so much whether LW was complying, but rather it raised the question for me of whether some jurisdictions just let people get away with being paid unemployment while not actually searching for work. The broader point is that some people think it’s automatic that people get paid unemployment and can be super lazy about looking for work, but in my experience that’s not true — people collecting unemployment aren’t just sitting back on vacation but have to take at least some minimum affirmative steps each week. It bugs me when I see the idea perpetuated that people collecting unemployment are just frittering away on vacation or something — it can be a very stressful time for those folks who are eagerly looking for their next job!

          1. Deathstar*

            I think it just means that having unemployment to collect takes some pressure off survival issues and allows him/her to breathe while planning a job hunt properly, rather than to just rush for the first paying job available without being able to consider fit/direction et al?

            1. LeRainDrop*

              That makes a whole lot of sense to me. Thanks for putting it that way. I’m really glad the LW is in a position where she’s able to do this. That former employer sure acted like a jerk in how they handled this. I would be so upset if I were LW and had been promised that small two-week severance, agreed to stay a few days to help with the transition, and then they even pulled that severance rug out from under me! She did a good job following through to at least get the letter of recommendation in her pocket. But I’m still angry at that employer!

            2. Junior Dev*

              Yes, I’m currently unemployed in a state where you have to apply to 2 jobs a week and this is how I handle it. If I weren’t getting benefits I think I would feel pressured to send out more than 2 applications, but would not put as much time or thought into them. Honestly most of my difficulty around UI benefits has involved dealing with weird bureacratic stuff, but the job search requirements are lax enough that I feel I have time to really think about what I want to do.

          2. Sue Wilson*

            I mean, the problem to me isn’t the stereotype but the idea that it’s anybody business what someone does with a finite income cushion, especially if they pay into it as in some states.

          3. Lissa*

            I’m in Canada and when I was on EI all I had to do was click a link that said I was looking for work/able to take work (can’t remember the exact wording, it was 3 or 4 years ago.).

            1. Jaybeetee*

              Same here. I was off and on EI a few times when I was in contract purgatory, and my brothers are seasonal and use EI regularly. You just click through an online check-in. Mind you, there are some rules, such as not leaving the country during the week, etc (you’re not supposed to be going on vacation while on EI), and my mother had a story about many years ago before online check-ins when she’d actually have to go into Service Canada occasionally and “prove” she was job searching (copies of applications, etc), but no one seems to follow up these days unless someone reports on you.

              The above requirements seem a bit steep to me. 3 applications a week shouldn’t be a big deal, but I’m thinking people in specialized/professional/niche jobs who just might have to wait for an opening, and may not be able to find 3 jobs a week in their field/region.

          4. Beautiful Loser*

            It is absolutely stressful and most states make you go visit the local work source and assign you an unemployment counselor. One of those nice folks who are absolutely clueless about the current job market. And they offer horrible job advice like just submitting your resume to companies that don’t have openings posted etc..

            Nothing more demoralizing than living in a super depressed area and having your unemployment counselor ask you why, with your advanced degrees and employment history you are unable to find a job…

          5. smokey*

            In my old state you didn’t have to look for work but the unemployment check was also way smaller than in any other state I’ve looked into (which is only a handful, but still…Way smaller). You did have to be available for work so you couldn’t literally go off on vacation or anything.

    2. Salyan*

      Really? Not that I disagree, but do we really want this comment section to degrade to simply name-calling?

  7. Jaybeetee*

    That company sounds like it’s circling the drain. Laying off employees and so beyond broke they’re looking for reasons to pull severance. But withholding the reference letter was just a jerk move. That wouldn’t cost a thing.

    I hope this OP will write in again in a year, to let us know if these guys even still exist.

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