New York Employment Lawyer Blog

MPG, an international media and advertising company, has laid off a group of workers in New York City. MPG has offered the workers a severance package but the workers have challenged three aspects of the package: (1) the amount of the severance pay, (2) a one sided non-disparagement clause that protects only the company and not the workers, and (3) a one sided waiver of the right to sue that only benefits MPG. These are common issues in severance pay negotiations. Here is the press release issued by the workers union.

At our employment law firm, we frequently represent individuals who are in a similar situation. The three items above are often the subject of severance package negotiations. People want more money and they want the terms of the severance agreement to be mutual - so they are protected too.

In my opinion, executives and employees should first focus on the money end. You cannot pay your bills with a nicely tailored severance agreement. It is all about the money, especially in these tough economic times. Increase the money and benefits and then focus on the terms of the agreement.

Companies typically balk at mutual non-disparagement clauses because they claim that they cannot control what their employees will say. But this argument can easily be countered by offering to narrow the application of the non-disparagement clause to a certain group of executives and employees who the company can control. Also, employees should insist that any waiver or release is mutual. After all, if an executive or employee is promising not to sue the company, the company should promise not to sue the employee. The point of a severance agreement is to end the employment relationship so a good agreement should put an end to any future disputes - for both sides.

Company's used to offer fired employees a severance package to soften the blow and help people survive until a new job is obtained. But companies are cutting back on severance and employees are often left with nothing. In France, workers are fighting back with threats of violence.

A new severance negotiation tactic is emerging in France. Disgruntled workers facing lay offs are gaining leverage with threats to destroy factories or equipment. 53 workers slated for termination at JLG, a French manufacturing firm, surrounded company cranes with gas cylinders and kindling and then went to the negotiating table. Their prior efforts to obtain severance peacefully failed, but when they installed the gas cylinders the company offered the workers a $42,000 severance package.

The JLG workers were following a group of fired Nortel employees. The Nortel employees demanded severance payments, but the company refused. The workers have now threatened to blow up the factory if they do not get severance. Nortel is still negotiating with the workers. Also, managers at New Fabris, a French car parts maker, are facing hostile threats from a group of fired workers who are demanding severance payments.

Here in America I have not heard of employees banding together and threatening harm in order to obtain severance. At my law firm, we get calls everyday from employees who have been fired and offered little or no severance. Most of the time, we cannot help them because the laws in America do not provide employees with rights to severance. Many European countries, by contrast, have laws that require severance payments, but not in America.