New York City Advertising Agency in Severance Pay Dispute
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.
