M. Steps to Take When you are Fired

Most employers fire people without warning. The fact you are terminated suddenly does not mean you should accept fewer benefits than you are entitled to. The following strategies can help increase severance benefits and/or damages in the event of a firing. Often, you do not need an employment lawyer to actually negotiate additional benefits on your behalf. You can do this yourself, and the following information will tell you how.

1.  Stall for time. Do not panic or scream at your boss when informed of the bad news. Stay calm. Request extra time to think things over. This may allow you to learn important facts and negotiate a better settlement. If possible, always avoid accepting the company's first offer.

2.  Review your employment contract or letter of agreement. If you signed a written contract, reread it. Review what it says about termination, because if the company fails to act according to the contract, your rights may be violated.

3.  Discover why you are were fired. This can help in the event you decide to sue your former employer. For example, once you receive a reason for the firing, the employer may be precluded from offering additional reasons at a trial, arbitration, or unemployment compensation hearing. Some states have service letter statutes requiring companies to specify in writing the reasons for an employee's termination. If the employer refuses to tell you why you were fired, or tells prospective employers other reasons later, you may have grounds for a lawsuit under the laws of these states.

Tip:Send a letter similar to the one on page 212 if you work in a service-letter-statute state. If the company fails to respond to your request, you may be entitled to damages after sending such a letter.

4.  Learn who made the decision to fire you. You may discover you were fired for petty reasons (such as jealousy) and can be reinstated. Or perhaps the punishment for a long-term worker "did not fit the crime" since other male workers were not similarly treated. Often, however, short of commencing a lawsuit, there may be little you can do other than negotiate a better severance package.

5.  Ask to see your personnel file. Some states permit terminated workers to review and copy the contents of their personnel files. Sometimes these files do not support firing decisions because they contain favorable recommendations and comments. If you can be fired only for cause and the company gives you specific reasons why you were fired, your file may demonstrate that such reasons are factually incorrect and/or legally insufficient. If this occurs, you may have a strong case against the former employer for breach of contract. If you have received excellent performance reviews and appraisals and the file indicates you received merit salary increases, you can use this information to contest the firing, negotiate more severance, obtain a favorable letter of recommendation, or better prepare you for future interviews with prospective employers.

6.  Reconstruct promises. If promises regarding job security were previously given, recall the time, place, and whether these statements were made in the presence of witnesses. Some courts are ruling that oral promises from high-ranking officers (such as the president) concerning job security are binding.

7.  Request an additional negotiating session to discuss your severance package. Generally there is no legal obligation for an employer to pay severance unless:

Although lower-level employees sometimes have difficulty arranging a negotiating session, most managers, employees in supervisory positions, executives, and officers generally are granted another interview.

Tip:Do not automatically acquiesce to a denial of benefits if you are fired and not offered severance, whatever your particular situation. Most salaried employees working for mid-to-large-size companies are now receiving severance when they are fired due to a layoff or business reorganization (but not for cause); others are negotiating and receiving greater severance than the company's first offer. Statistics from the author's own law practice after 18 years support this. The vast majority (more than 75%) of all clients who retain the author to negotiate firings obtain more severance and other benefits than the amount first offered directly to them by the ex-employer.

8.  Negotiate the package. At the meeting it is often best to avoid threatening litigation. At first, appeal to corporate decency and fair play instead. For example, it is better to say "As you know I recently became a widow and have to pay for two children in college right now; your offer of four weeks' severance is inadequate since it is unlikely I can find a comparable job in the next four weeks" rather than say "If you don't pay more money, I will sue."

Tip:Generally ask for an amount of severance pay equal to one month for each year on the job. Although the employer may initially balk at this request, especially if you have worked many years (e.g., more than 15), it will give you adequate room to bargain. Discuss an additional bonus, pension and profit sharing benefits, medical coverage, and other benefits paid by the company for an extended period of time. Discuss a favorable letter of reference, entitlement to unemployment insurance benefits, and how the company will announce the separation (called your "cover story"). The comprehensive checklist of negotiating strategies included later in this chapter will provide numerous details and points to ask for.

9.  Confirm all agreements in writing to document the final deal. Insist on receiving more money and other benefits before signing any release or waiver of a discrimination claim. Exit agreements, releases, and covenants not to sue can deprive you of valuable rights. Never sign one without the advice of a lawyer. The sample release beginning on page 262 is included for your review.

If the company fails to summarize your severance package in writing, it is a good idea to send a letter similar to the one beginning on page 214 which accurately reflects the final arrangement. Such a letter can eliminate confusion, particularly when the terms of the settlement are extensive.

10.  Apply for unemployment benefits. Unemployment benefits are available under state law. However, you may be denied benefits if you voluntarily left your job without a good reason, were fired for misconduct, or refused a valid job offer. You can request a hearing if you feel benefits were unfairly denied. Speak to a lawyer or a representative from your local Department of Labor if:

• you are fired but the employer requests your resignation (Note: by resigning you may be unknowingly forfeiting unemployment benefits.);
• your benefits are contested by the employer; or
• you require representation at an unemployment hearing.

Information on how to maximize an unemployment compensation claim is discussed in the next chapter.

11.  Do not be intimidated or forced into early retirement. Recognize that you may have rights, particularly if your early retirement causes you to lose large, expected financial benefits. Federal and state age discrimination laws protect older workers from early retirement pressure.

12.  Enforce your ERISA rights. The Employee Retirement Income Security Act of 1974 (ERISA) prohibits the discharge of any employee who is prevented from attaining immediate vested pension benefits, or who was exercising rights under ERISA and was fired as a result. ERISA also entitles employees to certain rights as participants in an employer's pension and/or profit-sharing plans. Plan participants are entitled to examine without charge all plan documents, including insurance contracts, annual reports, plan descriptions, and copies of documents filed by the plan with the U.S. Department of Labor. If you have not received a proper accounting or payment of your retirement benefits, send a letter to the employer certified mail, return receipt requested, requesting summaries of each plan's annual financial report. The letter on page 219 illustrates this. If you do not receive the information within 30 days, you can file a lawsuit in federal court.

In such a case, the court may require the plan administrator to provide the materials and pay you up to $100 a day until you receive them (unless the materials were not sent for reasons beyond the administrator's control). Thus, find out the name and address of the administrator of any of your retirement plans. If the company is stonewalling by not returning your calls, providing information, or paying your retirement benefits, consult a lawyer for advice.

13.  Enforce your COBRA rights. The federal Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires private employers who employ more than 20 workers on a typical business day to continue to make group health insurance available to workers who are discharged from employment. All employees who are discharged as a result of voluntary or involuntary termination (with the exception of those who are fired for gross misconduct) may elect to continue plan benefits currently in effect at their own cost provided the employee (or beneficiary) makes an initial payment within 30 days of notification and is not covered under Medicare or any other group plan. The law also applies to qualified beneficiaries who were covered by the employer's group health plan the day before the discharge. For example, if you choose not to continue such coverage, your spouse or dependent children may elect to continue coverage at their own expense. The extended coverage period is 18 months after termination of the covered employee; upon the death, divorce, or separation of the covered employee, the benefit coverage period is 36 months for spouses and dependents.

Tip:Be sure you know your rights under COBRA in the event you are fired. If an employer refuses to negotiate continued health benefits as a part of a severance package, fails to explain your rights and options, or fails to notify you of the existence of such benefits within 30 days of the discharge, contact the personnel office immediately. Follow up the telephone call with a letter sent certified mail, return receipt requested. The sample demand letter on page 220 illustrates this. If the employer refuses to offer continued COBRA benefits after a discharge for any reason, consult an experienced employment lawyer immediately.

14.  Take action if the employer is providing negative references to prospective employers. This includes.findlaw sending letters by certified mail, return receipt requested, to protect your rights. The letter can document what you have learned and put the employer on notice of your desire to take prompt legal action if the problem persists. Many states have enacted antiblacklisting statutes that punish employers for maliciously or willfully attempting to prevent former employees from finding work. In some states, untruthful job references are treated as crimes. You can also assert a lawsuit based on defamation and emotional distress if you discover that private employment data and confidential personnel records (such as medical information) were leaked to outsiders without your consent. More information on this subject is discussed in the next chapter.

15.  Resign from a job properly. It is best to request and sign a written contract with your new employer before resigning. This protects you if the new employer changes its mind and decides not to hire you, or tries to fire you after a short period of time. If you signed a prior contract, learn what it says regarding termination and comply with those terms. For example, if the contract states you can resign provided written notice is sent certified mail 60 days prior to the effective termination date, you must send timely notice. Failure to do so could result in the employer suing you for breach of contract.

16.  Return company property. Items such as automobile keys and samples must be returned to avoid claims of misappropriation, fraud, and breach of contract. When returning items by mail, get a receipt to prove delivery. If the company owes you money, you may consider holding the company's property to force a settlement. However, speak to a lawyer before taking such action since some states permit employees to retain company property as a lien but others don't.

Tip:In most states, an employer cannot withhold earned salary or accrued vacation benefits for any reason. Thus, assert your rights and demand your money where applicable.

17.  Speak to a lawyer to enforce your rights especially if you are owed wages, accrued overtime pay, vacation pay, an earned bonus, commissions, stock options, or other compensation, or believe the employer violated the law.

Tip:The lawyer may first advise you to send letters of protest on your own in the attempt to obtain an amicable settlement. The sample letters beginning on page 219 illustrate the kind of letters to send (always by certified mail, return receipt requested). If the employer fails to respond, or you are unsuccessful in resolving a dispute informally, it may be necessary to hire a lawyer. Information on how to hire a lawyer properly and work effectively with one is presented in Chapter Ten.