South Carolina companies are not typically obligated to offer severance to fired employees unless there’s a contract or policy that says otherwise. But when an employee is provided a severance offer, the question becomes: what leverage does the employee have to negotiate the severance to a higher amount?
What Facts Would Provide Leverage in a Severance Negotiation?
I review severance agreements every single week of my practice, mostly through severance review consultations. As any decent employment lawyer will tell you, it’s always best to make sure you understand what you’re agreeing to before you sign it. Some people who meet with me understand that they don’t have any legal claims, but they just want a lawyer to look it over and make sure there are no additional pitfalls to be aware of. [Read more: Sneaky Provisions in Severance Agreements]
But for every consultation, even where the employee thinks there’s no claim, I will still conduct an in-depth review of the circumstances that led to the termination. I want to see whether there’s any evidence of discrimination, harassment, or retaliation that might provide the basis for a legal claim. I want to figure out whether the employee recently took medical leave under the Family and Medical Leave Act, or requested a reasonable accommodation under the Americans with Disabilities Act, or made a complaint to HR or management about safety concerns under OSHA or overtime/minimum wage violations under the Fair Labor Standards Act. I want to know whether the employee recently filed for worker’s compensation for an on-the-job injury or complained to any state or federal agencies prior to termination. Any of these factual scenarios are exceptions to the traditional at-will nature of employment in South Carolina and could provide the basis for a legal claim.
And a legal claim provides leverage.
How Do We Use Legal Claims to Negotiate Severance?
Of course, even if the employee has a potential legal claim, we still have to review how strong the claim might be and what the claim might be worth. Some severance offers I see only offer one or two weeks of pay, so almost any viable claim will be worth more than that amount. But if I see the facts and evidence to support a much stronger claim, then we can go one of two ways: (1) we can turn down the offer altogether and move forward with the claim through the EEOC or in court; or (2) we can use the legal claim as leverage to negotiate for a more reasonable and fair amount of severance.
Because even if you have a great claim, a severance offer provides money in your pocket immediately, as opposed to a legal claim, which could potentially offer more money, but it would be far down the road, possibly even years from now. Some clients prefer the money now, even if it would be less, because they just lost their job and need the funds to live on right at the moment, which is completely understandable. Others may have savings or resources that would give them the financial ability to wait it out and see how the claim develops.
If we decide to negotiate severance, then I will gather up the facts and documents and put it all down in a response letter to the company and its attorney before making a counteroffer to the initial severance proposal. Sometimes I can reach an agreement with a company, and sometimes I cannot. If the company won’t be reasonable, then that’s fine. That’s what a lawsuit is for.
If you have questions about a severance agreement, then please feel free to reach out to my office at (864) 233-4351 or via our Contact Us page to set up a consultation. We will review your agreement together and determine what legal claims you might have and whether we can use those as leverage to negotiate your severance amount.
