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February 16, 2001
Severance Packages Getting More Generous
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Laid-off workers are getting more generous severance benefits than those typical of the late 1980s and early 1990s, the story reported, noting some firms are including stock options, trust funds and counseling services in addition to severance pay.
However, many severance perks come with strings attached, such as signing away rights to sue or make disparaging remarks about the company, or agreeing to stay on the job until a predetermined date, the story reports.
"Companies have just in the past decade started to recognize the increasing costs of litigating employment claims, so they're more proactive about what they can do to protect themselves," Timothy Bland, a Memphis-based employment lawyer was quoted in the story.
Some examples cited include:
- Rayovac of Madison, Wis., is offering stay bonuses along with severance packages to keep employees on the job until their last scheduled day.
- Workers at ICG Communications have been offered two weeks of additional severance pay for each year of service if they sign a non-litigation agreement.
- Amazon.com offered laid-off workers larger severance packages if they signed a "non-disparagement" agreement, which the company later reversed after some controversy over the offer.
- Most AOL employees laid off during the merger with Times Warner received stock options.
- Progress Energy, a company formed when Florida Progress and CP&L Energy merged, offered its laid off workers a minimum of 19 weeks severance and counseling services.