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Haleth's avatar

Is this normal in a separation letter?

Asked by Haleth (19513points) February 7th, 2011

Yesterday I learned that, because of restructuring in my company, my position is being eliminated. It’s a layoff, not an at-fault firing, but my separation agreement has a clause saying I will never seek or accept employment with the company again (?). The VP, who made the decision, said there were no problems with my job performance. Why would they include this clause? Everything else about the letter seems pretty standard.

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19 Answers

wundayatta's avatar

Maybe it has to do with pension benefits or 401k benefits. If you came back, you’d be vested, and they only want new people who are cheaper? Just a guess. It sounds really weird to me. It probably has something to do with a weird labor relations issue.

chyna's avatar

My separation letter states that if I come back to the company within two years I will retain my benefits, so it’s very possible what @wundayatta has said. Can you ask your supervisor or even the VP? Since you will never work there again, I wouldn’t worry about how you look or that you are putting someone on the spot by asking.

Jeruba's avatar

Oh, @Haleth, I’m so sorry you’re losing your dream job. But you do have great experience to take forward, starting with the experience of winning the job.

My guess is that it has something to do with realizing the benefits (to the company) of downsizing. My former company had an “early retirement” provision that you can’t return in any capacity, including contracting through a third party, within two years; that’s how long it would take (they said) to realize a gain over the loss of the termination payouts.

Whatever it means, you can be sure it’s something that can be expressed in dollars, which is the only measure that has meaning to a business.

cazzie's avatar

They are ‘paying you out’. It’s actually quite standard. There are rules with the money that you’ll be taking with you, that you are realising the cash because you are leaving the company, not because you’re doing a dodgy thing, like leaving and then reapplying and having a new position created for you. You know it’s a proper ‘downsizing’ move when they do this and not simply a ‘restructure’ that was popular in the 80’s and 90’s so that everyone lost their tenure and had to reapply for their same jobs with different titles.

You don’t mention what country you are in. This can make a great deal of difference as to why. I’m more accustomed to UK and Antipodean rules, and only vaguely familiar with US rules as to why these things happen. In the US they seem to be able to do almost anything to their employees.

BBSDTfamily's avatar

Why do you have to sign that paper? If they aren’t offering you a severance package, I’d either get the statement removed or refuse to sign.

cazzie's avatar

Oh, I’m assuming there is some sort of payout or severance. Isn’t there?

Haleth's avatar

I should have mentioned that I sign this in exchange for a week of severance pay.

@chyna There’s an HR rep that I can contact. You and @Jeruba both mentioned that it’s normal for contracts to say you can’t work there again for two years. That sounds normal; but my contract says I can never work there again.

@Jeruba Thank you! Your advice has helped me so much in this job. They’re changing the concept from a gourmet store (which I love) to a sandwich shop, so I probably wouldn’t have been happy in the new concept. I’ve already started looking.

Jeruba's avatar

A week?? Two weeks ought to be the minimum, same as standard notice of resignation. In some places it’s six months or more. You might be lucky you didn’t bank your career on this place.

You know what? For only a week’s pay, I would decline to sign. Seriously. And then see what happens.

cazzie's avatar

If you’re in the UK, the amount of severance is the same amount of time you’d have to give for your resignation. (in the old days.. 80 and 90’s) plus any vacation time owed to you and your last paycheck. I agree with @Jeruba on this one.

Haleth's avatar

So should I negotiate for more severance? It might only be a week of pay, but I could really use the money and would prefer not to lose it.

Thammuz's avatar

@Haleth In france if the layoff is mutually agreed they give you something like 6 years worth of pay in some cases (My uncle lives in France and has been laid off last year, best thing that ever happend to him. His CV is good enough that he found a job in less than a year and he still got all that money, he used to be one of the directors too, so six years worth of his paychecks is a boatload of money)

I say a week is bollocks. If you need that money to live you need to have enough money to live until find another job, you can’t just hope it fixes itself. I think you should put it in those terms and negotiate at least a month’s worth. That’s what I’d go for anyway.

Jeruba's avatar

I think they really want you to sign that agreement, for some reason. I’d say don’t accept this pittance. They’re not negotiating in good faith. Less than two weeks is unconscionable. And they probably do owe you for unused leave; you might want to check the labor laws in your state.

(You’d have to be pretty highly placed to get offered a year’s pay, never mind six, so don’t hold out for that.)

Please remind us of how long ago you started that job. Has it been a year?

BarnacleBill's avatar

Our company underwent a massive layoff last year, and the package was 2 weeks for every year, plus unused accrued vacation days. Any unused sick time was lost. People were given a date that they had to work up to, in order to transition work to those left. If you found another position and left before then it was considered voluntary separation, and you only received unused vacation time. The separation agreements did not have conditions like that; 3 people were back as temps within 3 months, and two were hired back into their old roles.

iamthemob's avatar

This is an incredibly common clause – and it simply comes from a desire for finality.

The concern is not that you’ll want to come back to work – but if you apply or are hired at a company and there is some adverse action (as simple as the application being rejected) there’s the potential that you can claim discrimination of some sort. You may also be asked to waive certain claims against the company for discrimination as part of this. These waivers don’t protect the company if there is a future adverse employment action against you even though you’re not an employee of the company – that would be a new and separate incident. The “don’t darken our doorstep” clauses (as they’re so colorfully called) are simply an assurance against future litigation.

As they are standard, the fact that they’re there shouldn’t raise any suspicion – they’re merely CYA provisions.

And any severance you get would be in exchange for this agreement. A week seems insanely short – and I don’t see why you’d be asked to sign something in exchange – it seems more like something they’d throw out as a courtesy. Generally, I’ve seen severance be based on a 1 month per year of service as a starting point.

I would also make sure that all and any communications are in writing from this point on, certified mail and email would be nice. If you speak on the phone, follow it up with the writing.

There is nothing wrong with negotiating for a larger severance. Since it all seems amicable at this point (as much as it can be), remember that the release represents a benefit to the company…you are being paid for the promise to refrain from doing things in the future that it is your legal right to do.

Haleth's avatar

@Jeruba Yes, it’s been a year.

@iamthemob Thanks for your answer. This was my first “real” job, so I’ve never had a severance letter before.

iamthemob's avatar

If you’ve been there a year, you deserve more for this. I would not sign it if you don’t get at least a month’s worth of severance. And I would not send it back to them if they asked for it until you have a new agreement in hand – and even then not until you’ve copied it.

Haleth's avatar

Update: Thanks to everyone for all the advice. I ended up signing the form and turning it in as-is. That’s probably not the best thing to do, but I just want to find a new job and move forward. I have two interviews this week so… fingers crossed!

Jeruba's avatar

Good luck, @Haleth—rooting for you!

Thammuz's avatar

Good luck!

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