Outten & Golden’s attorneys review severance agreements and advise clients about how to negotiate the best possible terms, including maximum benefits as well as severance pay. We also negotiate directly with the employer or its attorney to achieve the maximum benefits for our client.
Most employees receive more than a salary in exchange for their work. They may also receive benefits, such as health insurance (for which they may pay part of the premiums), life insurance, a 401(k) account, 401(k) matching contributions, short-term and long-term disability insurance, a pension, gym or country club membership, tuition reimbursement, free air travel, a company car… the list is limited only by the company’s willingness to provide such “fringe” benefits.
When an employee is dismissed without “cause” (which is normally defined as intentional misbehavior), the employer may offer a severance package that could include any or all of the benefits provided to the employee during employment; the value of the package will depend in part on the employee’s bargaining power. If the employer is covered by the federal law known as COBRA, the employee is legally entitled to choose to continue her health insurance under the employer’s group plan for a period of time by paying 102% of her full premium, but frequently the employer will continue to pay its part of the premium for the same length of time represented by the employee’s severance pay. For example, if the employee receives three months of severance pay, the ex-employer may continue to pay its share of the employee’s insurance premiums for three months.