Recently, major corporations such as General Motors, Verizon and Pfizer have announced employee buyouts for the end of this year. These buyouts illustrate the emotional and financial considerations that accompany their decision to enter severance agreements.
CBS CEO Les Moonves resigned on Sept. 9 after numerous sexual harassment allegations. Despite these serious charges, he may leave the network with a $120 million severance package. It is reported that CBS will donate $20 million of his financial settlement to organizations that support the #MeToo movement. His departure also provides important lessons about the importance of severance agreements.
Employers may offer severance agreements to smooth the departure for terminated employees. In return for certain benefits, however, the soon-to-be former employers want important concessions. Employees can increase their bargaining power by taking certain actions to help assure a softer financial landing after a job loss.
Labor laws usually do not require any severance package or severance agreements for employees. Those who are terminated for cause or at-will or low-level employees have less opportunities for receiving severance. There are several recommendations for negotiating a better agreement, according to the AARP.