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Important Employee Considerations Upon Termination or Layoff

Even in good economic times, businesses of every size scrutinize their operations and costs, sometimes leading to workforce reductions. With the recent economic downturn, employee reductions and terminations have become even more common. For employees, talk of difficult economic circumstances, downsizing, tough decisions and the like offers little consolation for losing their jobs. Instead, the primary concern is often, “what now?”

Among employees’ many concerns when they are notified of a workforce reduction or that their job is being terminated, there are several important considerations that employees should not overlook.

During Exit Meeting

This is a stressful meeting, likely filled with concern about your future and some measure of disbelief about what’s happening. Since the decision to terminate your employment has already been made, this is not a time to argue about how good an employee you are or how you are better than other employees being retained. Nor is this the time to argue that you are being discriminated against or that the employer is retaliating against you.

How you react during the exit meeting may be important to securing concessions from the employer and/or putting yourself in a better position for a possible lawsuit against the employer. Be polite and respectful. To the extent possible, you should consider obtaining the following from the employer:

  • A statement of the grounds for your termination. When it comes to filing a claim for unemployment benefits and deciding whether to pursue litigation, a stated reason for termination, in writing if possible, can be helpful.
  • A commitment from the employer for a positive or neutral reference. You will likely be on the market for another job. Securing a commitment from the employer to provide at least a neutral reference may be important to your job search.
  • An understanding as to departure mechanics. You should discuss how you will leave the premises, how you will get your personal items, and whether you will be permitted to send a departure email.

Release or Severance Agreement

In conjunction with a termination, it has become increasingly common for employers to require employees to sign a Release or Severance Agreement to obtain any severance from the employer. Gone are the days of gratuitous severance as a reward for an employee’s service. If your employer asks you to sign a release or severance agreement, you should take it seriously and carefully scrutinize its terms and requirements.

  • Review the agreement. Do not feel pressured to immediately review and evaluate it when the employer provides it. Instead, take it home and review the proposed Release or Severance Agreement.
    • Make sure you understand the agreement
    • Make sure the terms are clear and specific
    • Check for deadlines and act promptly
  • Consult an attorney. Even if you have no intention of filing a lawsuit, it’s worth consulting an attorney to ensure the proposed agreement is valid and adequately protects your rights and interests.
    • Consider whether the terms of the agreement are reasonable
    • Verify that your employer is supplying you adequate time to review and consider, as legally required for employees over 40
    • Confirm the agreement is offering you something of value to which you are not already entitled
    • Weigh costs and benefits of waiving rights and potential claims against your employer

General Considerations

When an employee is terminated or laid off, there are a lot of things to consider. One, of course, is future employment. But there are other important issues the employee must consider sooner rather than later, including the following:

  • Applying for unemployment benefits
  • Maintaining insurance coverage with COBRA or other private insurance
  • Scheduling health care appointments before existing employer-sponsored insurance expires
  • Obtaining pay from employer for accrued vacation time
  • Receiving your final paycheck
  • Whether to sign a release or severance agreement
  • Whether to pursue legal action against the employer relating to your termination

Many employers attempt to do right by their employees, even when making termination decisions, and most terminations are not driven by unlawful motives. Nonetheless, employees should diligently protect their rights and make sure that they get what they deserve.

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