Life at Up Up and Away Investment International: Chapter 8: (A serialized novel by Robert K. Stephen)

Chapter 8

Will the Doberman lawyers be needed in your “downsizing”?

So, you have a termination package in your hand. There is a line for you to sign before the law will consider it binding. Never sign anything on the spot! The first thing you should do is to determine how long largecorp’s offer is good for so you can take appropriate action before the expiration date which just might mean asking for an extension. The second thing you should do is review the terms of the severance offer for reasonableness. Then I would recommend you should retain legal counsel to review the offer and then help you negotiate a better offer if so advised or if all else fails then to litigate.

Lawyers speak of a “notice period” terminated employees are entitled to. This is essentially a common law term which has evolved from a series of court decisions. It measures the time a court would think it would take you to find alternative employment. This depends how senior you are, your age and skill set amongst other things. For example, a senior employee with a high executive functioning ability who is close to 65 ordinarily would face a lengthier job search that a 35-year-old with less seniority. The common law ordinarily gives a month’s notice per year of service. If you are entitled to a notice period of nine months you will receive 9 months of salary. The employer can also give you working notice where you continue to be employed during the notice period. This extremely rare as once you are fired you are no longer trusted so best to clear you out.

There is a ritual to termination offers given by largecorp. Largecorp’s counsel knows exactly what you are entitled to under both statutory and common law but in most cases they’ll low ball you. Then your counsel will up the ante to more than you would be legally entitled to and they’ll settle somewhere in the middle of the difference knowing full well most people will not litigate to recover their full legal entitlement. Litigation is awfully expensive and largecorp knows this so you’ll almost always be lowballed.

Now where things may be a bit less creative are if you had signed an employment contract with largecorp where you have agreed to a notice period upon termination. However even then there still may be benefits and bonus issues that need to be negotiated. Your employment contract may not be as tight as largecorp thought it was.

Depending on what province you reside in instead of an hourly fee payable to your lawyer you may be able to proceed by a contingency fee where there are no hourly legal fees but your lawyer gets a cut of any additional amount your lawyer obtains for you that exceeds largecorp’s original severance offer.

I don’t wish to bog you down with too many legal details but here are some key points you should be aware of concerning a termination offer by largecorp;

1. Employment Contract: You may have signed one when you accepted largecorp’s offer of employment. It may set forth fully or partially what you are entitled to upon termination. Simply because you agreed to it does not necessarily close the book on what your notice period is and your entitlement to other employment benefits. Often clauses in the employment contract can be ambiguous and poorly drafted. They may be worth a legal challenge.
2. Notice Period: Statutory law and both the common law offer differing notice periods. Statutory law usually offers a less substantial period (usually based upon years of service) than common law but common law can always come into play. The common law provides about a month per year of employment capping around two year’s notice. The higher the seniority of the victim, the years of service of the victim, the age of the victim and skill set of the victim are taken into consideration in establishing the common law notice period.
3. In Addition to the Standard Notice Period Punitive Damages May be Awarded; If you were fired in an oppressive and embarrassing manner the court may offer you what is called punitive damages punishing largecorp for treating you in a harsh and oppressive way.
4. Beware of the Americans: American law is far more parsimonious than Canadian law when it deals with notice periods which is generally speaking a week for each year of employment. If you are in a Canadian largecorp which is a subsidiary of an American largecorp don’t settle for the American standard.
5. Pay Careful Attention to Benefits: Pay close attention to all benefits like dental and health insurance, bonus payments, life insurance, professional fees, pension plan contributions and employment benefit plan contributions. These benefits should continue to be payable during the notice period. Of course there is the possibility you could be paid off in a lump sum as opposed to salary continuation.
6. Termination for Cause: The law offers virtually no protection if you were terminated “for cause” which means amongst other things, fraud, theft, incompetence, misappropriation of confidential information or trashing largecorp on social media! Again, consult a lawyer on this point as cause can be manufactured and it is often difficult for largecorp to show cause!
7. Your Duty to Mitigate: The common law provides you have a duty to mitigate your losses which means if you are on salary continuance during your notice period you must expend some effort to find alternative employment. How rigorous this may be in many respects depends on your age and skills. If you are 63 years old I highly doubt largecorp will relentlessly pursue and monitor your efforts to find new employment but be a good boy and girl and attend those outplacement sessions. It rather depends on largecorp’s attitude. Do keep a journal of your outplacement activities, networking activities and job interviews as you may be asked by the Human Resources Department to provide updates to prove you have been mitigating your losses. If they think you haven’t been trying hard enough they may turn off the taps.
8. Don’t Cheat: Your severance offer will turn off the taps of salary continuance either completely or pay you a certain incentive amount if you find employment during the notice period. If you feel like you have been fucked over by largecorp there is the thought that may cross your mind not to tell them you have been hired thus enabling a double salary. Do so at your own risk as there will be a clause in your severance offer requiring you to notify your largecorp if you have found employment. Beware that largecorp will be more than willing to hire a private detective. CRAP had me tailed twice. I am sure they would have clapped their hands in glee if they had found out I was going off to work without advising them I had found new employment.
9. Be Wary of Indemnification and Release Agreements: Once you settle there will be a possible indemnification and release agreement to be signed between largecorp and you. Pay attention to any restrictive covenants prohibiting you from accepting offers of employment from largecorp’s competitors for a certain period of time and in a certain geographic area. As you may have a very specific skill set this may be deadly to you. These types of agreements really do require an employment lawyer review.

OK then you have had your initial employment lawyer consultation. You can accept the offer. You can negotiate the offer on your own with your lawyer’s advice. You can have the offer negotiated between your lawyer and largecorp’s lawyer. Eventually you may decide to litigate which is very expensive. It rather is a matter of dollar-based math on what to do.

I should mention the concept of “constructive dismissal”. This is the situation where largecorp in effect demotes you in a variety of ways such as reducing the amount of your direct reports, reducing benefits or salary taking away your office or other actions that would humiliate a reasonable person. In this case you can pull the employment relationship plug and seek damages. Before pulling the plug do consult with an employment lawyer.

Let me emphasize that many of you dislike or are suspicious of lawyers. But when you have a termination offer in front of you I urge you to consult with a lawyer who specializes in employment law.