Getting laid off? Know your rights

By Jeanne Sahadi, CNN Business

The abrupt and unceremonious way that thousands of Twitter employees got laid off last week was a spectacle.

But it was also a helpful reminder that while employers can get rid of many workers at will (and with zero graciousness), employees are not without rights when they are laid off en masse.

Here’s a quick primer on what employees need to know.

How much advance notice should I get?

For a plant closing or a mass layoff, you should get at least 60 days notice, under the federal Worker Adjustment Retraining Notification (WARN) Act. Some states may require more notice — New York, for instance, requires 90 days. And states also may set stricter standards than the federal law, such as requiring employers with fewer workers to comply with the WARN Act.

If an employer is found to have violated the WARN Act, in addition to paying penalties to the state, it will be required to pay out up to 60 days (or more, depending on the state requirement) of back wages and benefits to those laid off, depending on how many days’ notice the company actually gave.

“Notice” in this instance means notifying the community at large but also each individual who will be laid off, said employment attorney Michael DuPont, who is managing shareholder at the Minnesota-based law firm Wagner, Falconer & Judd and also provides legal services through LegalShield.

If a company lays you off abruptly, it may be found to have complied with the WARN Act so long as the effective date of your layoff is at least 60 days after the day you got notice that you’re being let go, said employment attorney Alex Granovsky, cofounder of the New York-based law firm Granovsky & Sundaresh.

Technically you will remain on the company’s payroll and will continue to receive pay and benefits in the interim, and then any severance you’re given would kick in.

How much severance am I entitled to?

Un-fun fact: No law — federal or state — requires employers to offer you any severance when they lay you off, unless you have a union or individual employment contract that includes a provision for it.

That said, many employers do offer some form of severance to protect themselves from any potential legal claims you might bring as a result of your employment or termination.

A second reason many offer severance: “Good will and fairness to the employees and to the community as a whole. To offer additional compensation in recognition of the potentially tough time the employee and community would [experience],” DuPont said.

What do I give up in exchange for accepting severance?

An employer will want you to waive certain rights in exchange for money.

Put bluntly, “the company covers itself in every way a former employee can hurt [it],” Granovsky said.

Generally speaking you will waive your right to bring a claim against the company, such as discrimination, hostile work environment, pay violations or any other alleged wrongdoing.

You also typically will need to agree to several clauses that prohibit you from harming the company, he said. They include:

A confidentiality clause: This clause prohibits you from sharing details of the company’s business or even the terms of your severance agreement.

A non-disparagement clause: This prohibits you from badmouthing the place.

A cooperation clause: You agree to assist the company if it gets sued in the future over a matter that you know something about as a result of your tenure there.

A non-cooperation clause: This prohibits you from helping anyone else trying to sue the company.

A non-solicitation clause: This typically means you can’t poach your soon-to-be former employer’s clients or employees should you start working elsewhere or launch your own business.

Waiving these types of rights does not, however, excuse the employer from having to pay you what is already owed, such as a pension or earned vacation or sick leave. “The consideration offered for the waiver of the right to sue … must be something of value in addition to any of the employee’s existing entitlements,” the US Equal Employment Opportunity Commission (EEOC) notes.

Can I negotiate the terms of the severance?

If you think you have legitimate claims against the company, your employer would almost certainly rather you not sue, so it will likely be more open to negotiating the terms of your severance instead.

“A company would rather pay $100 now to avoid having to pay $150 later,” DuPont said.

If you don’t have a strong case that could justify filing a lawsuit, which you could use as a bargaining chip, you can still try to make the case for why your employer might sweeten your severance package.

“Asking is fine. You should ask. There’s no harm in asking,” Granovsky said.

You might ask for more months of paid health benefits if you or a family member on your insurance plan is battling cancer, DuPont noted as an example. Or if you’re a long-term employee in good standing or you have a special skill set that the employer might want to tap in the future, you might make a compelling case for why the company should offer you some additional pay.

Should I hire a lawyer?

Since a severance agreement is an important legal document that will affect your immediate future, it can be helpful to have an employment lawyer with experience in severance cases review the company’s offer.

If hiring a lawyer directly is too expensive, you might consider a less expensive service like LegalShield, which only charges about $30 a month to gain access to an employment attorney in your state who can review your offer, make sure it complies with the law and make a call on your behalf to your employer if you’re seeking modifications to the agreement.

If your case is complicated and involves further legal action, or if your severance agreement is more than 15 pages long, your costs will be higher, but you will get a discount on the hourly fees of the lawyer on your case.

Or, if you just have some very simple questions, some employment lawyers might offer a free consultation by phone.

How long will I have to decide whether to accept a severance package?

Under federal laws, if you’re 40 or older, you must be given at least 45 days in a group termination (21 days if your layoff is not part of a mass layoff) to decide whether to sign your severance agreement.

In either case, if you accept the offer you also must be given a 7-day period afterward to change your mind.

That said, each state may have its own requirements above the federal minimum requirements, DuPont said. So check your state’s Department of Labor site to see what its specific requirements are.

Will I lose my severance if I start earning income again?

Many employers may stop your severance payments if the company rehires you for a new position.

If you find a job elsewhere or start freelancing for others, some employers may choose to reduce your severance payments if your new source of income is less than what you used to be paid.

“They may say, ‘If you make less money we’ll only pay the delta,'” Granovsky said.

In either case, your severance agreement should state explicitly what the employer’s policy is. So don’t sign it until you’re clear about those terms.

But if the agreement is silent on the issue then you likely may continue to receive your full severance while also earning income from another source. “So that’s a win for the employee,” DuPont said.

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