Dealing w/ Draconian Severance Contracts?

Sadly... by QuantumWeasel · 2002-09-20 11:51 · Score: 2, Informative

This is pretty standard fare. Not fair, maybe.

You're in canada? LRB by sys$manager · 2002-09-20 11:51 · Score: 3, Informative

Take those papers straight to the labour relations board. They stand up for your rights for free (free council and such) and will make sure you get everything you deserve. That's how it works in BC, anyways.

Re:You're in canada? LRB by Screaming+Lunatic · 2002-09-20 12:12 · Score: 3, Informative

Yeah, the Labour Relations Board is definitely the way to go. Despite the fact that the Liberal government raped their funding. But that's another rant for another time.
Back to the original askslashdot. He says he wants his severance package. The company says you won't get it unless you sign certain papers.
If your original contract says you are entitled to a severance package and it doesn't state anything about "certain papers", then I don't see the problem. Both parties should be legally bound to the original contract and it's just a matter of sorting it out at the LBR if the company throws a hissy-fit.
But, IANAL.
If you are laid off, the bottom line is DON'T SIGN ANYTHING. Even if the document asks you to if you wear boxers or briefs (especially if the document asks you if you wear boxers or briefs). Human Resources & Development Canada (HDRC) will send you some paper work. You sign up for unemployment insurance and start lookin for another job.
If the company refuses to grant you your severance take it to the LRB.
I have received my papers and they are simply dragonian!
Hey, at least you got a dragon out of the whole deal.
Re:You're in canada? LRB by Dr.+Cam · 2002-09-20 13:36 · Score: 4, Informative

Actually, it's not the LRB you should talk to. The LRB's mandate has to do with unions and their relationships with companies. Individuals should talk to the Labour Standards Branch (that's the BC term, the other Provinces will have similar terminology).

In your case, you should talk to a lawyer. You can get half an hour for very little with most Bar Associations. Just call the local number.

Now, about the suing thing. If you accept a payout, usually that enjoins you from suing - that's protection for you and your former employer. It's another contract - they agree to pay you money to tide you over until you can find another job, and in return you agree not to sue them. If you were forced to sign under duress, that's another matter. If you think that what they are offering is inadequate, then you need to negotiate a better result. Again, a lawyer who specialises in employment law is the best person to talk to, because such people deal with these situations all the time, and can tell you what the market bears.

IANAL, but my field is HR consulting (I'm an Industrial Psychologist), and I deal fairly frequently with people who have been terminated - it's part of my practice. The non-disclosure aspect they may not be able to enforce - they terminated the contract, and a court might find that they thereby waived their rights. Again, you need a lawyer to give you advice on that.

Good luck.

IANAL, and this is not the place for legal advice! by beer_maker · 2002-09-20 11:52 · Score: 4, Informative

And if it was, we would need to see the document to give you any real advice about it.

Here's the best I can offer: Go See A Lawyer.

--
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As a layoff winner... by Nijika · 2002-09-20 12:00 · Score: 5, Informative

Luckily you're in Canada, where the layoff isn't such a bad thing if you're prepared. Some advice as a survivor (or lottery winner if you look at it that way).

1) Weigh the severance. How long could you coast on what they're giving you before you have to apply for UI?

2) Apply for UI right away (In Canada). You'll be entitled to at least 51% of your previous salary, and there are other benefits like education bonuses and stuff.

3) If you really are going to file a lawsuit, review why. If it's just because you're mad think again. It may end up costing you more than you ever win.

4) Those disclosure agreements are nearly impossible to enforce because they usually do step well beyond the laws they are built around.

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Luck favors the prepared, darling.

Re:As a layoff winner... by IIRCAFAIKIANAL · 2002-09-20 12:09 · Score: 3, Informative

Which is fine, because you have a limited number of weeks of UI and that won't change

ie/ if she is entitled to 14 weeks, her 14 weeks start when the 4 weeks you mention are up

AFAIK, correct me if i'm wrong

--
Robots are everywhere, and they eat old people's medicine for fuel.
Re:As a layoff winner... by Nogami_Saeko · 2002-09-20 13:03 · Score: 3, Informative

In BC it's a maximum of $413 per week, not per pay period. So $1652 month Of course, this is taxed like any other income (which is pretty stupid if you ask me), so you'll be making something more like $1200/month.

Not a lot by any means, but should be sufficient to keep a roof overhead and food in stomach while looking for another job.

--
"Nothing strengthens authority so much as silence." - Charles de Gaulle

It depends by scowling · 2002-09-20 12:02 · Score: 5, Informative

Is your severance package generous? That is, is it more than two weeks' pay? In any jurisdiction in Canada, you're entitled to two weeks' pay or two weeks' notice when being terminated without cause or laid off. They can't deny you that, end of story. Even if they go bankrupt, the principals of the company are personally responsible for two weeks' pay (if you don't get notice instead).

Now, IANAL.

If you sign away your right to sue, it's gone. You have entered into a binding contract; contract law in Canada is pretty straightforward. The questions become: is the severance package attractive enough? Will I regret signing away my ability to sue?

The third question is "do I want to burn my bridge?" If you refuse to sign, the odds increase that you won't get a good reference for future work, and tech work is harder and harder to find in Canada since the dot-bomb.

Were it me in your shoes and they were offering me (say) a month's pay, I'd sign, ask for a written reference, and start looking for work. Of course, I'd also bitch and moan about their ridiculous terms to anyone who'd listen, but that doesn't cost me anything.

--
www.kitchengeek.com -- Nosh for

Re:It depends by Arker · 2002-09-20 13:37 · Score: 3, Informative
If you sign away your right to sue, it's gone. You have entered into a binding contract; contract law in Canada is pretty straightforward.

IANAL, and I don't know much about Canadian law specifically, so no one should simply take my word on this without consulting further, preferably with a competent Canadian barrister who works in contract law. That said, I'm pretty sure Canadian contract law follows the main gist of common law in this area like the rest of the anglosphere, and that would mean that
1. Unless the severance package is more than he is otherwise legally entitled to, then this 'contract' is null and void on its face. This is because a valid contract is always an exchange - it requires that both parties receive a benefit. Therefore if they are only offering what he is already legally entitled to, either by contract or statute, this is not a legal contract and would be laughed out of court.
2. Judges tend to take a fairly dim view of contracts that would limit the judges ability to try any case they want. That is to say, even if it is a legal contract, if it went before a judge that for any reason whatsoever decided he'd rather try it, he would have no difficulty coming up with a pretext to void it. Judges have been doing that for many years.
So I must disagree with your statement quoted above.

That said, this guy definately needs to talk with a canadian contract lawyer and receive competent and specific legal advise before he signs anything!
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Usual, not unusal by Courageous · 2002-09-20 12:02 · Score: 4, Informative

These provisions are in no way unusual, they are boiler plate. And yes, they have the right. You do not have to sign, it's optional. Your severance pay is a courtesy, and they aren't required to pay you any. So if you want your severance pay, sign your papers. You're not going to get it if you don't. Your only reason to not sign these papers is if you believe you have a legitimate cause for legal action against this company.

C//

Re:Usual, not unusal by IIRCAFAIKIANAL · 2002-09-20 12:16 · Score: 5, Informative

Not true in Canada, for example, in Alberta (where I live):

The length of notice an employer is required to give depends on the duration of employment and must be in writing. The minimum notice requirements that employers must give are:

one week - for employment of more than three months, but less than two years
two weeks - for employment of two years, but less than four years,
four weeks - for employment of four years, but less than six years,
five weeks - for employment of six years, but less than eight years,
six weeks - for employment of eight years, but less than 10 years, and
eight weeks - for employment of 10 years or more.
An employer may choose to give pay for the required notice period instead of providing notice. A combination of written notice and pay in lieu of notice (termination pay) is also acceptable.

Taken from here

--
Robots are everywhere, and they eat old people's medicine for fuel.

Next Time by PotatoMan · 2002-09-20 12:05 · Score: 4, Informative

This is not a severance package; it's a contract. They want to pay you not to sue, etc. Treat it accordingly.

When you take your next job, learn from this. The time for negotiating a severance package is on the way in! A severance package is part of your total compensation, just like vacation, profit sharing, etc.

Get it in writing.

Re:Next Time by walt-sjc · 2002-09-20 14:53 · Score: 3, Informative

Yeah, in the US it's typically known as an Employment Agreement. I had one with a dot bomb and ended up with a NICE chunk of change at the end, significanty more than those that didn't. Note that unless you are Very valuable to a company, you probably won't get one. Also note that if a company goes bankrupt, the agreement means NOTHING as you are just one of the creditors. In fact, in a bankruptsy situation, the company CAN'T pay severance unless approved by the court (which has a close to zero chance of happening.) I've been in THAT situation too.

Anyway, these severance agreements are Standard Operating Proceedure, but may contain things that are not enforcable.

Been there, done that by Alderete · 2002-09-20 12:13 · Score: 5, Informative

A year and a half ago, my dot.bomb went under, and they gave us a pretty egregious agreement to sign. I signed it and turned it in, because I had not only severance (really, paying out of my vacation) but also several thousand dollars in expenses (training classes I'd put on my credit card).

However, upon further research and advice from others who had done this before, it turned out that I could have instead filed with the California Labor Board, and gotten not only the severance and expenses, but penalties if they were not paid in a timely fashion.

So, if I'd done some research, and been willing to go without the checks for a few extra weeks (or maybe a few months), I might have actually made more money not signing the agreement

In the end, though, the one-sided terms made the agreement a null contract; I was getting nothing (that I was not already entitled to by law), the company was getting something, and a valid contract requires that both parties actually get something from the other. I don't feel bound by the agreement (in areas like confidentiality, not talking trash, etc. -- though I don't have any reason to violate them either), and don't have any reason to test the more expensive clauses (not suing).

The real point here is, if you don't want to sign for some reason, look into your local labor laws. In California, the process for filing is (apparently) fairly simple, and the process of finding against the company is straightforward.

There are usually local organizations, usually not-for-profits, which can advise you of your rights and the law. Look for them via Google, if you can't find someone to give you a direct reference.

Good luck!

Is it worth it? by phriedom · 2002-09-20 12:16 · Score: 4, Informative

When a co-worker was layed off from our rather small company, he refused the deal, much to the consternation of the HR director. The sticking point for him was the non-compete clause. He decided it was foolish to rule out employment from a competitor for a couple weeks worth of pay. Here in my state, the employer isn't required to pay you for saved-up-vacation when you leave, nor any kind of severance, so the difference between what they have to do (pay you for the time you worked) and what they are offering could be quite substantial.

A second cow-worker told me his former boss had threatened to withold the last paycheck unless he signed the papers, which would have been illegal. So he called the guys bluff saying "Keep it, I've already signed everything I'm going to sign back when I was hired." The boss caved and handed him his money.

If you are thinking of not taking the deal, you could try editing the severance agreement yourself and deleting the objectionable parts before signing it as a counter-offer.

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Severance should be negotiated up front by Anonymous Coward · 2002-09-20 12:17 · Score: 3, Informative

I know that a lot of people won't believe this, but not everyone works as an 'at will' employee with zero recourse. Negotiation is part of the deal. It took me quite a while to figure that out, and I'm always learning more.

When you leave a decent position where you have seniority, you're potentially giving up a lot. You need to negotiate vacation, severance, option-buy-back on pre-IPO companies, extended option maturation (do they expire 30 days after you're laid off?) and anything else that is important to you.

This is most important with start-ups because 90% of them fail. Even fewer actually IPO. What is your exit strategy? As an early investor, how do you attain 'liquidity'? Don't be afraid to ask that question up-front - your manager is. If it doesn't IPO for 10 years, how do you cash in on your shares? Because when you leave, they may not pay you anything for your shares.

You need a contract!

Once the product is designed and built, they may decide that they no longer need as many engineers and instead should concentrate on sales and marketing. Uh, okay - but they'd better buy your shares back for what they've been telling people they are now worth. They also need to pay you that severance you negotiated up front.

If they tell you 'sign or else', consider that the deal might not be as good as one where the terms are actually negotiated. Terminate at any time without reason?

In general, you need good career management skills (and a great career - slackers need not apply) to pull this off. Do any schools teach that? Any recommendations for good books?

Manitoba by topham · 2002-09-20 12:19 · Score: 3, Informative

Copied text from Manitoba labour (note: this is NOT copies of the regulations per say, but rather their booklet. In and of itself it has no legal standing.. blah blah blah...) [it is supposed to represent the labour code though...]

Employers who intend to terminate the employment of
50 or more employees within a period of 4 weeks must
provide written notice to the Minister of Labour, any
applicable union, and to the affected employees as follows:
NUMBER OF EMPLOYEES WEEKS OF NOTICE REQUIRED
50 - 100 10
101 - 299 14
300+ 18
If the required notice is not provided, the employer must
pay wages equivalent to the weeks of notice listed above.

If it is less than 50 employees then it is 1 pay period.

Re:Don't waste your time.. by barc0001 · 2002-09-20 12:21 · Score: 4, Informative

Not necessarily 2 weeks.. In BC, you get 2 weeks after being there a year, and more if you were there 3+ years:

http://www.qp.gov.bc.ca/statreg/stat/E/96113_01. ht m#section63

Liability resulting from length of service
63 (1) After 3 consecutive months of employment, the employer becomes liable to pay an employee an amount equal to one week's wages as compensation for length of service.

(2) The employer's liability for compensation for length of service increases as follows:

(a) after 12 consecutive months of employment, to an amount equal to 2 weeks' wages;

(b) after 3 consecutive years of employment, to an amount equal to 3 weeks' wages plus one additional week's wages for each additional year of employment, to a maximum of 8 weeks' wages.

been there... somewhat... by Cedric+C.+Girouard · 2002-09-20 12:39 · Score: 5, Informative

Last December, I burned out, went on long time disability with my corporate insurance package, and three weeks later, kaboom! Get called in a meeting, where they tell me I'm no longer part of the company's plan.

They tried to have me sign a bunch of papers, which of course, I did not want to sign. Said I had to think it over. They even tried to pressure me into signing. I took them to a lawyer specialized in labor issues. He said I should just tell them to shove it. Legally, when on sick leave, you cannot be fired. So I decided to run with it, lodged a complaint with the labor board in Quebec. Real easy process to start.

Within days, I was contacted by one of their lawyers, saying I had done the right thing. Within a month, I had gone to mediation with my ex employer, got a very fat check out of it, a letter of reference, and a contact person at the company that will by law confirm whatever was written in the letter.

Lesson here: TALK TO A LAWYER.

Lesson 2: Get in touch with the labor board in your province. They are there to protect the WORKERS. They will side with you if you have a cause, or tell you up front you're wasting their time and yours.

'nuff said. Hope things will work out good for you.

--

Marriage is considered capital punishment for the theft of a goat in some third world countries...

Re:Can't speak for Canada, but... by Anonymous Coward · 2002-09-20 12:48 · Score: 2, Informative

In most of the US this agreement would be legally binding and enforceable. It is a settlement agreement between you and the company. The company is giving you consideration (i.e. money, benefits, etc) in return for you agreeing to accept that consideration as fair compensation for any claims you may have from your firing.

Most of the time you might as well sign this agreement, since you won't get the severance pay without it, and in the US you generally aren't entitled to it. Secondly, because the majority of US states are considered AT-WILL employment states, your employer can fire you at their whim. You could only sue for claims arrising out of sexual harrassment or discrimination based on a (legally) protected class.

Even if you are the target of discrimination, it's very difficult to actually prove in court and the detrimental effect on your carrer when potential employeers do a background check and find that suit, generally make it not worth the trouble. Generally, it's in your own best interest to sign the agreement and take the severance package.

Nolo Press has a decent self-help/tutorial about employees rights that covers these issues, and btw. these agreements are written by corporate lawyers and they generally actually do know what is legal and binding in a contract, so don't believe your average slashdotter that claims blah blah blah isn't legally enforcable.

Check your province's offical government website by Anonymous Coward · 2002-09-20 12:53 · Score: 1, Informative

Google gave me this for Ontarion, for example ...

http://www.gov.on.ca/LAB/es/chap4e.htm#notice

Employment Standards Act by lethargic · 2002-09-20 12:59 · Score: 2, Informative

If you are in Ontario, take a look at http://www.gov.on.ca/LAB/es/ese.htm

I'm sure the other provinces have some similar.

I can recomend a good lawyer by cdn-programmer · 2002-09-20 13:04 · Score: 2, Informative

I don't know what city you are in but you need to hire a competant atourney to deal with this bullshit.

Never but never sign these agreements. The company probably never had a trade secret or even an idea that was worth anything and when you sign you just leave yourself wide open to accusations.

Several years ago I had an employer ask me to sign such a form and stated it was a "condition of employment". I replied that it was a "condition of employment" that I DO NOT sign agreements like this. I won. I guess they figured that since I was the only one they had on staff who knew how to develop the software they needed that they better back down.

The best advice I ever heard was from the fellow (now retired) who developed one the the best contouring packages in the world. It was the one that Amoco used. Yup - it was good. His point is that he doesn't want to be privy to other people's confidential information.

As he said: In the first place it probably isn't all that great and I'll probably come up with a better solution anyways. But, if I'm privy to what they claim they disclosed to me, then the door is open for them to claim I stole their ideas. In the second place, if what they have is really so great, then I can't use it anyway.

I think his reasoning is very clear. If you think it is confidential then I don't wnat to know about it. Sorry - just keep it to yourself!

-----------

Think about those confidentiality agreements employees are so willing to sign. It can limit their employment opportunities down the track. I am an employer. No way I'm going to get involved with an IP exposure if I can avoid it. So generally I hire consultant who are not encumbered.

Those agreements do not benefit the employee in any way and are pretty useless from the companys' standpoint as well. If someone IS interested in stealing trade secrets you can be sure that a little agreement is not even going to slow them down. You see, your ex employer has to PROVE that YOU DID IT. That can be nigh on impossible. But the litigation is real and it can cost you 1000's to defend yourself.

Just say NO!

Ontario Provisions by Jason+Pollock · 2002-09-20 13:05 · Score: 3, Informative

Here are Ontario's provisions:

Jason Pollock

Can I get severance pay?

You can get severance pay only if:

you have worked five or more years for your employer; and

your employer is in one of the following two groups:

your employer has a payroll in Ontario of at least $2,500,000 a year; or

your employer is no longer going to be carrying on all or part of the business, and 50 or more workers will lose their jobs for this reason inside a six-month period.

How much severance pay do I get?

If you qualify for severance pay, your employer will give you one week's regular pay for each year of employment.

There is a limit of 26 weeks' regular pay for severance pay.

So even if you have worked longer than 26 years, 26 weeks' pay is the most you can get.

You also get credit for full months of employment. For example, if you have worked for 10 ½ years, your employer would pay you 10 ½ weeks' pay as your severance pay.

Typically (at least in the states)... by DaveAtFraud · 2002-09-20 13:26 · Score: 3, Informative

A non-disclosure/non-compete agreement can not be construed as making it impossible for you to work "in your chosen profession." Example: a doctor leaves a pratice and signs a non-compete agreement: he/she shouldn't open a clinic across the street from his/her previous employer but he/she is only trained to pratice a particular type of medicine. The agreement cannot keep him/her from working in his/her specialty or force him/her to relocate.

This brings up the next step: You would need to disclose the existence of the agreement to anyone hiring you since they would potentially also be liable however; the further their business is from that of your about to be previous employer would make any attempt to sue unlikely to win. Note: law suits are about who has the best lawyer so a big company might not be a bad idea if you can go that route.

Final point: this is a civil matter; not criminal. Your previous employer has to bring suit against you and/or your next employer to make it stick. If you go to work for their direct competitor doing essentially the same work and almost invariably using your knowledge of their product against them, they can undoubtedly make it stick. Go to work for somebody who does something different (albeit, using software) and chances are they can't make it stick.

Actually, that wasn't final... you can also see what happens if you make a counter proposal that just says you won't work for a competitor. It might work and, if not, it makes your case stronger if you go to somebody and get sued.

BTW, IANAL and IANAC (I am not a Cannuck)

--
They that can give up essential liberty to obtain a little temporary safety deserve neither safety nor liberty.
Ben

Why you're being laid off from a dot-bomb by billstewart · 2002-09-20 15:38 · Score: 3, Informative

In most cases, you can read the papers and figure out if they're worth signing, though apparently some Canadian provinces have severance-pay laws that may be at least as generous as the one you're getting. But if you're working for a dot-bomb, and they're laying you off and giving you a severance package, there's probably a good reason why, which is that they're not making enough money to keep employing you. Suing a dying company is seldom worthwhile. Sign the papers, take the check, and deposit it on your way home, unless you've gotten hints that they'll be bankrupt within the month, in which case you should probably go to the company's bank and get the cash directly.

--

Bill Stewart
New Fast-Compression-only CPR http://preview.tinyurl.com/dy575ks

Do NOT go to the Labour Relations Board by Anonymous Coward · 2002-09-20 19:05 · Score: 5, Informative

I am an employment lawyer practicing in Canada (Ontario specifically), so I know this subject very well.

Why do people who know something about computers assume that this makes them qualified to give legal opinions? Do NOT go to the Labour Relations Board with those severance documents - they're not interested in seeing them and, contrary to popular opinion, they're not in the business of reviewing documents like that or giving employees advice about their termination. The labour relations board is, by and large, in the business of adjudicating disputes under the labour relations act of the province in question. The labour relations act deals primarily with disputes between employers and unions, and has virtually nothing to do with individual, non-union employee terminations.

What you want to do is to take those documents to a lawyer experienced in employment law, and get some advice as to whether the offer that is being proposed to you is reasonable or not.

In all the common law provinces of Canada (i.e. every province except Quebec) a non-government employee is entitled to reasonable notice of termination or compensation in lieu of reasonable notice, unless he or she has signed a valid employment contract substituting some other period of notice (and most employees have not done this). This is a common law entitlement enforced through the courts, not the Labour Relations Board, which has nothing to do with this. Of course you're not entitled to this if you're terminated for just cause, but economic downsizing is not just cause. The amount of notice that is "reasonable" depends primarily but not exclusively on your age, length of service and position with the Company and it's not a mathematical formula. It's also subject to a reduction for other earnings in subsequent employment during the reasonable notice period, or for earnings that you could have made during that period with reasonable diligence. For example, if you're terminated without notice, and your reasonable notice period is determined to be six months, your entitlement is six months pay (including things like benefit coverage) less your earnings in other employment in the six month period following your date of termination, either actual earnings or earnings you could have made if you had been diligently searching for other employment instead of spending your days watching TV and reading Slashdot :).

You're probably in a provincially regulated company (most tech companies would be provincial) so I'm not going to bother talking about unjust dismissal complaints under the Canada Labour Code - your lawyer can tell you about them if it turns out your employer is federally regulated.

There is also a statutory minimum entitlement upon termination which varies from province to province. This amount is often much, much less than the common law entitlement and an employer cannot demand a release in return for paying you this statutory minimum. This entitlement is enforced by making a complaint to an employment standards officer at the Ministry of Labour (or whatever they call it in your province) again, this is NOT the Labour Relations Board. In Ontario for about the past 3 or 4 years the labour relations board has had the jurisdiction to hear appeals from decisions of employment standards officers, but the labour relations board does not make initial decisions about employment standards entitlements and, as I said above, it has nothing to do with common law entitlement, which is the real issue you need to know about.

In Ontario commencing an employment standards complaint precludes you from suing for wrongful dismissal, so watch out. Your province may be different.

It is very, very common for a downsizing employer in Canada to offer an amount in excess of the statutory minimum in return for a release. It's a perfectly acceptable thing to do, but you need to determine whether the amount that is being offered is a realistic approximation of your common law entitlement.
The lawyer experienced in employment law can tell you almost immediately whether the Company's offer is reasonable.

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Dealing w/ Draconian Severance Contracts?

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