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Severance Package Advice Requested California

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  • Severance Package Advice Requested California

    I'll offer the particulars and thank you in advance for any and all insights. I'm deeply appreciative of any help you can offer. If you need more info, happy to provide it.

    I was told yesterday that I was being severed from my business development job at a Fortune 500 company due "to changing business needs and the need to eliminate my position." They're offering 11 weeks as calculated by my base salary of 140K. I've only been with the company for 17 months. I'm 37, white male, not a protected class, living in SF, CA.

    A few things to consider:

    1. I am the highest paid member of the BD team. They are in a budget crunch and looking to cut the bottom line.

    2. My total potential compensation (with bonus) should equal 200K-260K this year.

    3. This action is not motivated by performance. I have never received any formal corrective action, the letter doesn't cite performance, and my boss reassured me that's not the issue.

    4. This comes within weeks of the firing of our division president and our subsequent consolidation with another division. We've hired in other divisions though (we call on the same customers). One of the hires was in SF last month to a job co-equal to my own. Maybe apropos of nothing legally, but interesting.

    5. One other colleague of mine is being let go on the East Coast - and I suspect that his pay is 2nd or 3rd highest in our group. There were eight of us - now six.

    6. I currently have around 3.5 million dollars of my work "in the pipeline" for the company that they'll close out in 2010. Straight to their bottom line with no recompense to me. The perils of being paid by bonus, I suppose.

    7. I have 12.5 PTO days accrued; they claim they will pay only 5 and then subtract the rest out from what I would have been paid via severance (in other words, 11 weeks minus 7.5 days so that they're "meeting the law", but IMO subverting its intent). The dollar value of those lost 7.5 days is $3769.

    8. No offer to extend health insurance, straight to COBRA.

    9. Claim that I must sign my severance by March 12, 2010 or it goes off of the table.

    10. Calling it a dysfunctional work environment would be putting it mildly. A discovery process would be ugly for them.

    I'm not inclined to pursue legal recourse as a general principle (never have in my life), but I find the package weak. I'm curious if I might be able to get a better deal. However, that may just be frustration talking and I should move on.

    What are your thoughts?

    Thanks again for your help.

  • #2
    Duplicate post - do not respond to. (Also posted under Ca. Labor Law)
    Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around. Leo Buscaglia

    Live in peace with animals. Animals bring love to our hearts and warmth to our souls.

    Comment


    • #3
      For your item #6, you might want to take a look at the CA-DLSE manual. CA has stricter rules then other states on what might be called partially earned compensation that the employer wants to forfeit because of the termination. I am not saying that this is a sure thing, but I am saying that it is worth looking at.
      http://www.dir.ca.gov/dlse/Manual-Instructions.htm

      For your item #7, vacation/PTO is legally vested in CA. It cannot be forfeited. Now, if your employer owed you say $1,000 in PTO, and offered a $1.500 severance package including PTO, technically that would not be a forfeit and would not be illegal. Mentally back out the full value of the PTO (which you legally must be paid anyhow) from the severance offer. If the severance offer is positive, then the offer is likely legal. But use that difference number to decide if the offer is meaningful.
      http://www.dir.ca.gov/dlse/FAQ_Vacation.htm

      Everything else you mention is either not in my area of expertise or otherwise sets off any particular flags for me. Not all terminations are legal. Most are quite legal. Especially in a down economy. I am not saying that your pending termination is certainly legal, but I will say that nothing you have said (regards termination) so far looks particularly noteworthy.
      "Reality is that which, when you stop believing in it, doesn't go away".
      Philip K. **** (1928-1982)

      Comment


      • #4
        This was to be the duplicate thread as noted & not responded to. I will go ahead & make the other thread the duplicate since we got a response here.
        Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around. Leo Buscaglia

        Live in peace with animals. Animals bring love to our hearts and warmth to our souls.

        Comment


        • #5
          Originally posted by DAW View Post
          For your item #6, you might want to take a look at the CA-DLSE manual. CA has stricter rules then other states on what might be called partially earned compensation that the employer wants to forfeit because of the termination. I am not saying that this is a sure thing, but I am saying that it is worth looking at.
          http://www.dir.ca.gov/dlse/Manual-Instructions.htm

          For your item #7, vacation/PTO is legally vested in CA. It cannot be forfeited. Now, if your employer owed you say $1,000 in PTO, and offered a $1.500 severance package including PTO, technically that would not be a forfeit and would not be illegal. Mentally back out the full value of the PTO (which you legally must be paid anyhow) from the severance offer. If the severance offer is positive, then the offer is likely legal. But use that difference number to decide if the offer is meaningful.
          http://www.dir.ca.gov/dlse/FAQ_Vacation.htm
          Thanks. Great response. I will definitely take a look at that link regarding partially earned compensation.

          Regarding the portion of PTO they want to pay me via severance, I would point out that their stated policy for severance is 11 weeks for my grade and tenure. It seems to me that they're sidestepping the CA law.

          There's no question that the severance offer is still positive if you back out the PTO. My issue is that it doesn't strike me as meaningful.

          Comment


          • #6
            Unless you have a contract that states differently, all they really "owe" you is your accrued PTO.

            I don't know I would say this is a "weak" offer, especially when taking into account your length of service. Many companies I know of pay 2 weeks severance for every year worked...meaning you would only get 2 weeks severance.

            I don't really see where you have much negotiation room unless you think you have some type of legal case that you could pursue.

            Comment


            • #7
              Agree with HR for Me. Short of a contract, 11 weeks for 17 months of employment is VERY generous, IMHO.
              I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

              Comment


              • #8
                Patty & hr -

                Thanks for your input. I certainly didn't mean to suggest ingratitude. What they're offering me is their standard policy. My argument is premised more on the idea that if the stated standard severance for an employee of my job band and tenure is 11 weeks, then playing with the PTO payouts strikes me as odd.

                I suppose some of my irritation stems from how hard they recruited to bring me over, that I was well-regarded by peers and managers, but appear to have been strictly laid off based on my salary. It may have been better for me had I not accepted such a generous salary offer to begin with!

                Ces la vie.

                Comment


                • #9
                  Quick update:

                  Armed with some of the helpful links provided by DAW, I was able to negotiate better terms which included full payout of my PTO and some compensatory consideration for bonus.

                  Although according to some on this thread, I should have meekly accepted my lot

                  Thanks for the help, DAW.

                  Comment


                  • #10
                    There was nothing in HR or Patty's response that suggested that you "meekly accept your lot." All they were commenting on is that your bargaining position was not that strong.

                    Since you were able to negotiate a better deal, good for you. Too many people come to this site thinking they are entitled to more than they really are.

                    Dave

                    Comment

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