How do I negotiate a severance package in Michigan?

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David A. Nacht - Employment & Labor - Super Lawyers

Answered by: David A. Nacht

Located in Ann Arbor, MINachtLaw, P.C.

Ann Arbor, MI
Phone: 888-312-7173
Fax: 734-663-7592

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If you have been thinking, “I am about to get fired … now what?” You can calm the anxiety and fear of the unknown by investing in tailored legal advice from an employment attorney. Think of it as: outside general counsel for your career. 

A buyout (a holdover term from when more employees were hired under contract), early retirement or layoff can all involve a severance package. Your position and number of years with the company will affect what you are offered. A midlevel manager with 20 years of service would have a greater likelihood of a larger severance package. 

When is severance offered as a matter of course? 

The three main reasons are: 

  1. The company offers it
  2. An employer promised it to you in a contract
  3. Your employer is afraid you might sue them (this could be related to age, disability or national origin discrimination, FMLA retaliation, sexual harassment or lack of opportunity based on gender) 

Often a company is buying your promise not to sue them in the future. This is where an initial discussion with an experienced attorney can uncover potential leverage you may have that could increase the odds you receive a severance package or that could affect the amount offered. 

Watch out for these two issues 

Noncompete clauses are provisions that restrict competition for a certain amount of time (often between 2 and 5 years) within a geographical area. They often hide in the fine print of a severance agreement. They are enforced in Michigan and Ohio, and can easily restrict future career opportunities. 

An experienced employment lawyer can help you understand the risk. Some of the questions you may need to consider include: 

  • What did your employer teach you? Who did they introduce you to?
  • What are your short-term and long-term career goals? Will your next venture compete in the same market? Could it take business away from your old employer?
  • Can you afford to defend against a lawsuit? 

Options usually exist to mitigate the risk of litigation. Negotiating a narrowly tailored noncompete based on your responses is one of the best ways to ward off future disputes. 

The other issue is related to claims of retaliation. If you have any indication that the termination of your position was related to your complaint about and/or refusal to participate in an illegal activity, you must act quickly. An incredibly short window of time – 90 days – exists to bring whistleblower claims. 

In addition, take care in deciding whom to speak with about your concerns. Ask questions to find out how long an attorney has been handling similar cases. Then, expect lots of questions at an initial case evaluation. This is the only way that an experienced employment lawyer can provide truly tailored legal advice that will protect your career today and into the future.

Disclaimer: The answer is intended to be for informational purposes only. It should not be relied on as legal advice, nor construed as a form of attorney-client relationship.

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