I am writing this week about a topic that may be all too familiar to some of you: losing your job. When it happens — and I speak from first-hand experience — it is not only a financial blow, but it can also be devastating to your self-confidence. This, of course, has a direct impact on your ability to find a new job, further exacerbating the financial impact.
In the past year, thousands of Americans have been laid off. The 20,000 layoffs recently announced by Kmart made headlines, but that doesn't mean the experience is less painful if you happen to be the sole person let go by a smaller employer.
Finally, there is a book to help you get through the ordeal and back on your feet. It's called Fired, Downsized, or Laid Off (Henry Holt & Co., 352 pp, $15). I like it for a number of reasons. First, while its author, Alan L. Sklover, is a lawyer, he is a fine communicator who speaks plain English instead of "legalese."
This book is written for the layperson. It clearly lays out your rights (fewer than you probably think), arms you with clear-cut strategies to negotiate a fair severance package, and explains what paperwork you should — and perhaps should not — sign. He goes so far as to suggest that in most cases you probably don't need an attorney!
The subtitle of the book is even more intriguing: "What Your Employer Doesn't Want You to Know and How to Fight Back."
But the reason I really like this book because Sklover is a lawyer with a heart. His years of experience representing both corporations and individuals involved in this arena have given him a tremendous empathy for those affected. You get the sense that he understands your pain. He acknowledges the emotional and psychological aspects of losing your job and provides down-to-earth suggestions on how to cope — who to pour your heart out to (not your former office buddies), for instance, and how to not feel like a failure.
I had a long conversation with Sklover recently (no, I have not lost my job!). The following is a rough transcript:
Gail Buckner: Alan, when you're sitting in your boss's office and he has just told you you are being terminated, what should you do?
Alan Sklover: Nothing! Don't sign anything, say anything or agree to anything. Just listen. Usually, two people representing your employer are present: one from human resources and either your boss or a company attorney. And they work off a script. The script tells you you're being terminated and what benefits you are or are not being offered. It's also designed to get you to sign a release — don't! Just listen and ask questions. It's always OK to ask questions.
G.B.: Such as?
A.S.: "Why am I being let go?"
They're under no obligation to give you a reason. Since the abolition of slavery we are in what's called an "at will" employment environment. Unless you've signed an employment contract, either side is free to end the relationship "at will."
However, in the past twenty years, laws have been enacted to protect people from discriminatory or retaliatory firing because of things such as pregnancy, age, gender, race, disability and so forth. So it always to pays to ask whether you're just part of a general lay-off or if it is due to something related to you personally, such as job performance. If they elaborate, it can only help you later in the negotiating process.
You're looking for a hint that you've been fired improperly. Other questions would include: "When does this take effect?" "Will I have a chance to say good-bye to my co-workers?" "When will I be able to retrieve my personal belongings?"
G.B.: Although your company has the right to fire you, don't they have to offer you some basic benefits?
A.S.: If you've been covered by a health plan through your employer, under COBRA rules, they must allow you to remain covered by the plan for 18 months. However, you become responsible for paying the monthly premiums.
If a company is going to lay off more than 50 people, under the "Worker Adjustment and Retraining Act" it must give two months' notice. Your company is under no obligation to give you a severance package unless this is part of an employment contract.
G.B.: When you've just heard "the script" from the head of HR laying out the terms of your dismissal, you certainly don't feel as if there is any room to negotiate. It feels as if the terms are set in stone. Are you saying this is not usually the case?
A.S.: Right. It helps if you can understand your company's perspective. They want you to leave — quietly and quickly. They want you to take their package. That's why they will often offer you a severance package even if they're not contractually liable to do so. What they're saying is, "We'll give you 'X', but we want something in return." That "something" is the return of their property [such as a company car], your silence and the release from any claims of improper dismissal.
G.B.: So the reason you don't want to sign anything is that by accepting their package, you are giving up your right to sue. I have a friend who worked for the same firm as a sales rep for 24 years. In fact, it's the only company she has ever worked for. Her entire career was with this firm. She consistently won trips for her sales numbers. Then last fall, after she filed a sexual harassment suit against her supervisor and six months before she turned 50 she was suddenly fired on some trumped-up charge. Her severance package was a joke. If she thinks she has a legitimate case, what should she do?
A.S.: First, in a letter to her divisional manager or the CEO of the company, she should explain why she thinks she has a claim and why she deserves a better severance package.
She shouldn't send the letter to anyone in the human resources department. In her case, she should say she feels her firing was in retaliation for the sexual harassment claim she fired against her boss.
She should also say she believes she was singled out because of her age. [Older employees are more costly in terms of salary and benefits.] Her letter should conclude with a request that they consider these issues and adjust her severance package. She should send the letter either by FedEx or email so she will have a receipt showing it arrived.
In my years of negotiating, I can tell you there is always extra money for those who ask. The key is that your request must be the 3 "Rs": Respectful, Reasonable and Rational.
G.B.: What can you do if they ignore or dismiss your letter?
A.S.: You have two choices: take their original offer and move on, or consult an attorney. But one of the reasons I wrote this book is to tell people about the strategies they can use to help themselves without getting an attorney involved.
G.B.: You also address the emotional issues tied up with losing your job. I've been there. And it seems to me that you go through emotional stages very much like those you experience when someone dies — denial, anger, a sense of helplessness, and then finally a resolve to get on with life. My way of dealing with this was to talk, talk, talk. But I know others just withdraw and try to work through it on their own.
A.S.: When you lose your job, you go through a period of grieving. Don't try to be a hero. You need the support of others at this time. Be open and honest with your family and friends. But don't complain or cry to your former colleagues; something you say could hurt you in your negotiations.
And it puts your former co-workers in an awkward position, especially if they're still employed at your old company.
G.B.: OK, you wake up the next day without a job to go to. Now what?
A.S.: First, take stock of your resources. Write down how much money you have to get you through the transition [to your next job]. Don't underestimate this — it is a "life transition." Getting through it to the next stage could take two weeks, two months or two years. So make a list of your expenses — rent/mortgage, insurance, food, utilities, etc. If you're losing a company car, how will you replace this? Next, list the sources of cash available — bank account balances, home equity, and so forth.
G.B.: This is more than a financial exercise, isn't it?
A.S.: Yes. Putting down your available resources on paper is very calming. You might conclude, "I only have two week's worth of savings. I need to get a job — any job — immediately, so I can have a paycheck coming in until while I look for the job I really want." Or, once everything is laid out, you might decide, "I'm OK. I can survive three months."
G.B.: The important thing is this exercise gets you thinking from a rational perspective instead of one that is emotionally-charged.
A.S.: Right. You can't think clearly if you're angry. It also won't help your marriage or your sleep. The more you think positively and with an orientation toward the future, the less you'll think about the past. Think about the positive things you have. Counting your blessings [good health, for instance] is important both practically and emotionally. A calm person negotiates better than an angry one.
Know someone who's been laid off? Might be in danger of it? Get this book. In fact, get it for yourself just because you never know...
If you have a question for Gail Buckner and the Your $ Matters column, send them to firstname.lastname@example.org along with your name and phone number.
The views expressed in this article are those of Ms. Buckner or the individual commentator, and do not necessarily reflect the views of Putnam Investments Inc. or any of its affiliates. You should consult your own financial adviser for advice regarding your particular financial circumstances. This article is for information only and is not an offer of the sale of any mutual fund or other investment.