Josh Van Kampen

Intro: 00:01 Human resources, employee relations, the legal department are aligned against you. Your employer has trained for this day, the day you’ve become an expendable number at work. There are robust laws that may protect you, but unlike the company, you’ve not been drilled on how to wield them. You’re playing catch up. There are pitfalls to avoid and countermeasures to deploy that may save your job or put you in the best position to negotiate a favorable settlement. Minutes matter. Your words and actions matter even more. The Walking Papers podcast offers the first foray into learning how to turn the tables when you’ve been targeted at work. Knowledge is power. Let’s get started.

Robert Ingalls: 00:45 Welcome to episode 9 of the Walking Papers podcast. I am Robert Ingalls and I will be your host. The title of this episode is The Price is Right. What can you recover if you win your wrongful termination case? Tell us about that title, Josh.

Josh Van Kampen: 01:04 I remember being at pop pop’s house, who’s my grandpa and, I hope that I’m right, I’m pretty sure it was 11 o’clock in the morning. Price is Right, or maybe noon, every day. And maybe the younger listeners may not even know what Price is Right is, but it was a game where you were basically guessing to the dollar, the price of a car or a washer or dryer, things like that. And in a wrongful termination case, part of what a lawyer is going to do for you is figure out what your case is worth. And we’re going to actually help you to do that in this podcast by explaining what sort of factors lawyers consider when they’re figuring out the price of a wrongful termination case.

Robert Ingalls: 01:48 Got you. So let’s say I’m thinking of filing a wrongful termination case, but I really don’t know whether it’s worth it. What kind of questions should I be asking myself?

Josh Van Kampen: 01:58 Well, when we value a case, we do so on two axis. So the first is, what is the likelihood that we’re going to win in our case, and I think we’ll probably do a separate podcast on that one, Rob, to try to predict likelihood of success and with the factors we consider on whether or not we’re going to win. But the other axis, which is a lot easier to analyze is, assuming you win, what are you likely to receive? What sort of damages are you likely to receive from a jury? And on that one it’s math, and buckets. And so there are different buckets that a jury or a judge can put money in. And so we’re going to go over those various buckets and describe them and also some ranges of dollars that can be put in those buckets.

Robert Ingalls: 02:47 Gotcha. Tell me about some of those buckets.

Josh Van Kampen: 02:51 All right. So lucky seven, we’re going to rattle them off altogether, just the roadmap. First we’re going to talk about back pay and back fringe benefits. That’s bucket one. Bucket two is front pay and benefits, which is basically future lost wages. The third is reputational damage. The fourth being what are called consequential damages. Fifth, pain and suffering or emotional distress. Sixth, liquidated damages or punitive damages and then the final bucket, my favorite bucket, attorney’s fees; attorney’s fees and costs. Unfortunately in the employment claims, that are broad, the employer is actually ordered to pay attorney’s fees and costs for the employee and so we’ll speak about how that works as well.

Robert Ingalls: 03:44 So let’s go ahead and break some of those down. Let’s start with back pay and fringe benefits.

Josh Van Kampen: 03:48 With back-pay, just emphasize back. This is backward looking. So at some point, if the case doesn’t settle you’re going to have a jury trial. And that jury trial, a typical lifespan of a case these days is between 18 months and 24 months. So let’s assume two years from now, you won your jury verdict, what could you get in back pay? Well, that would be any money that you would have earned had you not been terminated from your employer. So that’s easy to do because we’d have access to your W2 statements and also your paychecks to know what you would have earned. And so the meter just goes, no different than if you’re in a taxi cab, you get in and you’re driving around and you see the meter run. Well, the meter is running on your lost wages and benefits from the day after that your terminated. So we’ve got to calculate and figure out what you would have earned over those two years.

Josh Van Kampen: 04:43 Now the bad news is that the employer actually gets credit for any money that you earn after you’ve been terminated. So understand that you can’t be terminated and sit on your couch, put your feet up and binge-watch on Walking Dead episodes. You have a duty to mitigate your damages, which means you have a duty to try to find comparable employment. And if you don’t do that you can actually have your damages cut off because you’re expected to conduct a “reasonably diligent search.” But understand, once you get that job, in terms of what you’re going to recover in your back pay award, it’s going to be deducted dollar for dollar from anything that you earn from your new employer.

Josh Van Kampen: 05:31 So sometimes it’s a catch 22 for an employee because on the one hand, for your legal claim it’s worth more if you are out of work a longer period of time, or if you take a job that is making substantially less than your old job, the value of your legal claim actually goes down because the employer is getting a credit, dollar for dollar, for those earnings. But the flip side of it too is, if you don’t conduct your reasonably diligent search, that can also cut off your damages. So what I always tell my clients is look, you live in the real world, not the legal world. So, go out there, try to get the best job you can, as soon as you can. Don’t worry about the value of a legal claim, but just understand that the more successful you are in that job search, the lower your back pay award is going to be. So that’s back pay.

Josh Van Kampen: 06:29 Now let’s talk about back fringe benefits. So fringe benefits are the medical insurance, vision, dental, 401K match, pension, health savings, account eligibility. All the sort of bells and whistles that you love to have working for a company. If you are out of work and let’s say you had to elect COBRA insurance, for example, and you bought COBRA for six months, well you can recover the cost of that COBRA premium for six months. Or let’s say you couldn’t afford COBRA and so you were now incurring out-of-pocket medical expenses that would have been covered if you would have never been fired, we can recover those out-of-pocket medical expenses as well. And same thing goes with a 401k match, that’s easy to do. So if before you were the beneficiary of a 3% 401K match from the company. You’re fired. Your new employer doesn’t have a 401K match. We’re going to want to recover that lost 3% 401k match.

Josh Van Kampen: 07:33 Now what’s nice is that you also get interest. So add up whatever those figures are, at least in North Carolina, you can recover 8% interest on those amounts, which is a nice feature, especially since at least right, as of today the markets are cratering as we’re filming this podcast here, in March 2020.

Robert Ingalls: 07:54 And at least if they do drag it out, you’re recovering something additional for that.

Josh Van Kampen: 08:01 Right. And then you say thank you very much.

Robert Ingalls: 08:04 That’s probably not what you’re feeling, but I’m sure-

Josh Van Kampen: 08:06 Right.

Robert Ingalls: 08:07 So onto the second one, future pay and fringe benefits.

Josh Van Kampen: 08:11 Right. So understand with back pay and benefits, that’s automatic. So if you win, you’re getting your back pay, you’re getting your back fringe benefits. Front pay or future lost wages, that’s discretionary. The judge in your case, not the jury, is going to decide whether or not you should receive any future lost wages. And so on the top end, the most that obviously that you could seek to recover would be whatever you would have earned through age 66, which is the standard retirement age.

Robert Ingalls: 08:44 So you can’t just say, I’m nimble, I was going to work to 70?

Josh Van Kampen: 08:46 I have clients that argue that all the time. But so 66 is the norm but let’s be realistic. If you got terminated and you were 40, is it fair for us to expect the company to pay you 26 years of front pay? No, of course not. Because you’re not going to be unemployed for 26 years. So in negotiations anyway, a general rule of thumb for me is somewhere around five years. But remember we were talking about mitigation earnings. So even when you’re calculating your front pay, we’re still going to be deducting what we’re projecting to be your mitigation earnings in the future. So let’s say in the hypothetical, you make 50 grand less per year in your new job, well we’re going to want to get 50 grand times five years of future losses.

Robert Ingalls: 09:35 All right. That brings us to reputational damage.

Josh Van Kampen: 09:40 On this one, whenever you’re terminated, especially if you’re terminated for cause, and let’s say that’s a pretext for discrimination, that termination for cause is it’ll damage your reputation. So it’s always frustrating for me where I have a client who has meticulously worked their way up a career ladder over, say 20 years of employment and then all of a sudden they inherit a new manager who wrongfully terminates them or has a bias against them. You get knocked off your ladder, it’s really hard to get back on when you have a termination on your record. And so you can also recover reputational damages separate and apart from your future lost wages. Question is, how do you quantify that? Sometimes we’ll hire a forensic accountant or a vocational expert to testify about that issue but ultimately it’s like pain and suffering in the sense that you can put a number on it, but it isn’t necessarily an exact science.

Robert Ingalls: 10:46 All right, well that takes us to consequential damages.

Josh Van Kampen: 10:49 Yeah and that’s the one that, why couldn’t they give it a better name? You can’t figure out what the heck consequential damages mean.

Robert Ingalls: 10:56 Not from the context.

Josh Van Kampen: 10:57 Right, exactly. So let me translate that. It’s basically miscellaneous damages that you’ve suffered as a consequence of your job loss. It’s not uncommon for folks to have to cash out their 401K plans to make ends meet after a termination. You incur a penalty for doing that so let’s assume it was a $20,000 penalty, you can recover that $20,000 back from the employer if you win. Let’s say you had to take out a home equity loan in order to keep your house, and that cost you 20 grand in interest, as a consequence of the termination, we can recover that interest as well. And then I’ve had clients who had to sell family heirlooms or prized possessions just to make ends meet and to make such sales under duress. So if it was calculable that you got 20% less on an item because you needed to sell it in a hurry, we can seek to recover that.

Josh Van Kampen: 11:58 Also within consequential damages are relocation expenses. So if you’ve got to move, pack up, you had to hire a mover, you had to sell your house, hire a real estate agent, you had to pay the real estate commission. Those are all damages you suffered as a consequence of a termination and we can seek to recover those as well. Now importantly on back pay and front pay and fringe benefits and consequential damages, there are no damages caps on those. We’re about to talk about some buckets in which there are caps on how much a jury or a judge can award. There are no caps on those first three buckets we’re talking about.

Robert Ingalls: 12:42 All right, so then that brings us to pain and suffering emotional distress.

Josh Van Kampen: 12:47 Yeah. So this one is hard to talk about. Well first of all we were just talking earlier about math and formulas. Well with pain and suffering or emotional distress, there is no formula for calculating that. And so even when we’re in trial, the lawyers even struggle to figure out, well what should we ask the jury to award for pain and suffering or emotional distress? And to some extent it’s really just going with your gut. But there are certainly different factors that we consider in valuing what sort of emotional distress or pain and suffering we’re going to ask for.

Josh Van Kampen: 13:26 The most important one for me is, is there a medical basis? So for listeners who have been wrongfully terminated, you know how you’re feeling as you’re listening to this. You can’t sleep. You’re racked with anxiety. You used to play volleyball all the time, and now you’re not playing volleyball. You’re not going to the movies. You look in the mirror and you know that you’re different, but you haven’t gone and talked to a doctor or a therapist. All you’re doing is playing right into the employer’s hands by not doing that because guess what they’re going to do? They’re going to argue that you were not hurt. You were not traumatized by the termination because you never talked to a doctor about it. You never spoke to a therapist.

Josh Van Kampen: 14:12 So please, if you know that that termination has been a traumatic event for you, and for most people it really is, please go talk to your primary care physician about how you’re feeling and if your primary thinks that it’s appropriate for you to talk to a therapist, go talk to a therapist. And what’s more, be a good patient. So if you start in therapy, stay in therapy. If your doctor prescribes you an antidepressant or an anti-anxiety medication, and obviously if it’s not working or you had a bad reaction, you should stop. But be a good patient and follow your doctor’s advice in taking your medication because the bean counters on the other side of a table at a mediation that are representing the company are going to be assigning a higher value to your pain and suffering and emotional distress if there’s a basis for it.

Josh Van Kampen: 15:08 Now another thing to consider though too is I’ll readily admit to the listeners, hey I’ve been to a counselor before. That doesn’t mean that just because I have a preexisting condition or I’ve seen a counselor before in my life doesn’t mean I can’t recover for pain and suffering and emotional distress as a result of the termination, because the judge and the jury are going to basically figure out what was from what. So let’s say that before you had a depression diagnosis and you were taking five milligrams of Welbutrin. You got fired, you went back to the doctor, and now your dosage has been upped to another 10 milligrams, for example.

Josh Van Kampen: 15:51 Well that’s an exacerbation in a preexisting depression condition and so we can go to a judge and jury and say, well see, it got worse. And so it’s appropriate for there to be some compensation for that worsening. Same thing goes for counseling. We don’t go through life in this world unscathed. And so it’s not uncommon for people to have counseling for different sorts of traumas that happened before. Don’t let that stop you because if your therapist or your doctor is able to carve that out and connect the dots to say that the termination has messed you up further then you can be compensated for that.

Robert Ingalls: 16:30 Now are there any pitfalls to watch out for that the employer may try to tactically deploy?

Josh Van Kampen: 16:36 Yeah. One trap is, understand you’re not able to recover emotional distress damages because you’re stressed out about you can’t pay your bills. So everybody that loses their job is stressed about making ends meet. The stress about making ends meet is not compensable. The employer’s not responsible for your stress about not paying bills. So if you’re in a deposition and the company attorney is asking you questions about your stress level or your anxiety, he or she’s probably going to try to lead you down this, oh, it was about… I understand the financial losses and that must have been very stressful, was that mostly what you were worried about? No. No, it was because you hurt my heart when you wrongfully terminated me.

Robert Ingalls: 17:29 Right. Trying to lead you to the swamp.

Josh Van Kampen: 17:32 It wasn’t because I was worried about my credit card bill. But they absolutely… That’s a really good way to put it, leading to the slaughter. And the other thing is the company attorney is going to try to get you to put more emphasis on the other traumas in your life so that he can say those were the main factors in why you had an increase in your dosage, versus the termination itself.

Robert Ingalls: 17:56 Now we started this out discussing how there were no caps on the last ones we talked about, but what is the cap on the pain and suffering and emotional distress?

Josh Van Kampen: 18:07 So does it make any sense to you that Congress would pass caps back in the 90s and then not update those caps?

Robert Ingalls: 18:18 That sounds about right to me.

Josh Van Kampen: 18:19 For inflation? So there are caps that are literally still in place since the Clinton administration, and so they’re really low. So for most employers, the cap under title seven of the Civil Rights Act, or the Americans with Disabilities Act is $300,000. But depending on how small the employer is, if it’s under 50 employees the cap is actually $50,000, for emotional distress or pain and suffering. Now, this is why you need a good lawyer.

Robert Ingalls: 18:51 I thought you were about to come with workarounds.

Josh Van Kampen: 18:52 Sure. There are workarounds to get out from under these stupid caps. In North Carolina, we almost always bring a companion claim to our federal claim. So you’ve got a federal cap on emotional distress, but if you see for wrongful discharge under North Carolina common law, you don’t have a cap on emotional distress damages. So we always have a counterpart wrongful termination claim under North Carolina law.

Robert Ingalls: 19:19 All right. So then tell us about liquidated punitive damages.

Josh Van Kampen: 19:23 These are basically damages where the purpose of it is to punish the employer for doing a bad thing and also deterring this employer or other employers from acting in a similar fashion. So when you’re valuing a claim, we usually don’t rely on or put a lot of money in these liquidated damages or punitive damages buckets because it’s a pretty high bar to be able to recover those. The legal term for doing so is, basically we have to show maliciousness or willful and wanton behavior. So that doesn’t tell our listeners anything.

Josh Van Kampen: 20:05 Let me translate that to say where it is so obvious that the employer doesn’t give a care about what employment obligations there are. They’re going to do whatever the hell they want and deal with the consequences later. That’s malicious. That’s reckless. And that sort of arrogance, brazenness is what you need. Most employers these days, although in the era of the Trump administration, we’re seeing more and more of this sort of cowboy behavior. But in general, it’s the exception to run into that sort of behavior but when you do, it’s actually really good for your case.

Josh Van Kampen: 20:42 So if it’s an age discrimination case, you can recover liquidated damages. Liquidated damages are double damages, so when you see liquidated, think double. And that is double whatever your back pay award would have been; very nice feature to the Age Discrimination Act. And then under the other federal employment laws, you can recover punitive damages on those… Remember we talked before about those crappy old caps? They’re actually in place and they pertain both to punitive damages and pain and suffering combined. So can you imagine, no matter how brazen the conduct or how traumatic the injury that there would be a cap of $300,000, for both?

Robert Ingalls: 21:29 That certainly works well for the employer.

Josh Van Kampen: 21:31 Right. Good thing you have a savvy lawyer who knows workarounds to get out from under those stupid old caps. But even under North Carolina, sorry to say there’s a cap on punitive damages but not as bad. So under North Carolina law you can get three times your lost wages, three times your pain and suffering. So if your pain and suffering and lost wages is a million bucks, well you can get 3 million bucks in punitive damages in North Carolina. So that’s nice.

Robert Ingalls: 22:05 All right. And that brings us to your favorite one, attorney’s fees and costs.

Josh Van Kampen: 22:09 Attorney’s fees and costs. Anytime we’re at a mediation, I’m sitting across the table from a business owner, the company lawyer, I say, “Understand that you’re paying for my time as I’m sitting here today being a pain in your ass, and you’re going to pay for every minute of my time, in all likelihood all the way through a trial, if we win. And sometimes judges will reduce attorney fee awards if you’re not very successful or let’s say I wasn’t efficient with my time or that sort of thing and there can be circumstances where it’s appropriate to reduce an attorney fee award. But for sure the general rule is that, where you’re suing for federal employment discrimination or wrongful termination, the company is going to be ordered to pay the attorney fee and cost.

Josh Van Kampen: 23:00 And we represent a lot of executives but we also represent a lot of factory workers too, or people in the service industry. And it’s not uncommon to have a case where maybe the lost wages, back pay and front pay was $200,000 but our attorney fee petition was $400,000. And so when we’re negotiating with a company, for example at a mediation, we’re pointing out, well look, you’re undervaluing the claim if all you’re thinking about is the lost wages and benefits, because the attorney fee award is going to be double that. So we’re always reminding employers about the fact that these are called fee shifting provisions, where the fees are shifted to the defendant if they lose.

Robert Ingalls: 23:44 All right, well before we go, tell me about the Van Kampen Law approach to negotiations. If I come in and I have a case like this, take me through what this is going to look like together.

Josh Van Kampen: 23:56 Well it could be a really short road or it could be a really long road, but our clients are always wanting this road to be as short as possible. And so our playbook is emphasized on exerting a maximum amount of pressure and intensity and aggressiveness as fast as possible, so that we can get the employer to buckle, basically. But it starts out with a polite knock. There are law firms in town that will write a mean nasty letter and threatening to file the lawsuit in seven days if this money isn’t paid, and a whole lot of bluster. Like I said before, fire and brimstone. That is not an effective way to get a case settled, initially.

Josh Van Kampen: 24:43 And so we arrive with a polite knock at the door in the form of a very short letter of representation. And where we’re going to be concentrating our efforts in getting a case settled is not in a letter writing campaign, but in that first contact with the company attorney or representative. So we view that first contact with that company attorney as almost as important as an opening statement in a jury trial. And so we’ll spend hours upon hours upon hours actually orchestrating our script of how we’re going to present our client’s case in that first call because that’s the smart thing to do. We’re going to work really hard, really fast, really early to try to get a case settled.

Josh Van Kampen: 25:30 But you have to remember too though, be prepared if that doesn’t work. And my personal batting average in cases, say coming out of a severance negotiation context, is about 600 or 60% success rate for an early settlement, I’d say. But after that, you’ve got to have a playbook of escalation points. And so I don’t want to give away all my secrets of escalation points, but what we’re trying to get employers in town to understand, and I think most of them do by now, is that the longer you fight us in negotiations, the more expensive it’s going to be. And employer, you’re going to get your best deal early than if you make our client wait and fight. And so that’s our approach.

Robert Ingalls: 26:18 Well, is there any last words?

Josh Van Kampen: 26:20 No, I just appreciate everybody who’s listening and I’m hoping that you’ve cracked up at least a few times in some of these podcasts.

Robert Ingalls: 26:28 All right, well thanks Josh.

Josh Van Kampen: 26:29 All right, thanks.

Speaker 1: 26:32 Congratulations for taking an important initial step in turning the tables at work but this podcast is just an educational resource. It does not constitute legal advice and is no substitute for consulting an employment attorney about your unique situation before making legal decisions. Visit our website for more online resources and videos at NCemploymentattorneys.com or better yet, call (704) 247-3245 for a free initial intake interview, so Van Kampen Law can evaluate your case. Until next time, keep your head up and your wits about you.

Intro: 00:01 Human resources, employee relations, the legal department are aligned against you. Your employer has trained for this day, the day you’ve become an expendable number at work. There are robust laws that may protect you, but, unlike the company, you’ve not been drilled on how to wield them. You’re playing catch-up. There are pitfalls to avoid and countermeasures to deploy that may save your job or put you in the best position to negotiate a favorable settlement. Minutes matter. Your words and actions matter even more.

Intro: 00:33 The Walking Papers Podcast offers the first foray into learning how to turn the tables when you’ve been targeted at work. Knowledge is power. Let’s get started.

Robert Ingalls: 00:45 I’m Robert Ingalls and I am back today with attorney Josh Van Kampen to discuss severance packages. Welcome Josh.

Josh Van Kampen: 00:53 Hi. How’s it going?

Robert Ingalls: 00:54 I am lovely. Thank you. Josh, what is a severance package?

Josh Van Kampen: 01:00 It’s kind of a dark term, isn’t it? Severance. Well, it means you’ve been severed from your job. Severance packages aren’t all bad if they’re good packages. Generally severance packages include monetary payments, usually some period of weeks or months of pay. Then also continuation of health, medical, dental, the fringe benefits that you would normally receive if you were still employed.

Josh Van Kampen: 01:31 Then severance packages come with a huge string attached, which is your waiver of your legal claims in receipt for that money. Then the severance packages are drafted by evil and management-side employment attorneys who have slanted them so heavily toward their employer’s interest. They can be pretty distasteful documents, pride swallowing documents sometimes. We’re going to, in this podcast, be talking about things that we want to negotiate out of severance agreements, things we want to negotiate into severance agreements, and then obviously the elephant in the room is to talk about increasing severance offers and how to go about enhancing your severance package.

Robert Ingalls: 02:16 Now, are there any particular laws that govern severance packages?

Josh Van Kampen: 02:19 Yes. There’s a law called ERISA, and only masochistic attorneys want to specialize in ERISA, because it’s very obscure and has a lot of obscure tax implications attached to it. Most publicly traded companies or sophisticated privately held companies often have what are called severance plans. As employees, you’re actually entitled to request a copy of your summary plan description, or SPD for short.

Josh Van Kampen: 02:50 This document will define what the standard severance package is. Oftentimes there are different gradations of severance pay depending on what category you fall in within a summary plan description. For example, C suite executives, corporate officers often have their own severance plan. Those are the richest severance plans that you’re going to see. Then different gradations of professional employees may have a different formula that they’re paid under. Then finally there are ERISA plans oftentimes for hourly employees.

Josh Van Kampen: 03:27 Listeners need to understand that these are the standard plans, and you actually are entitled to receive whatever the standard package is, if you fall within whatever criteria is set forth in the summary plan description.

Robert Ingalls: 03:41 Now, if they come to me with this standard package, is there any wiggle room there? Is that the end of it, or is there negotiation room?

Josh Van Kampen: 03:51 Don’t buy it when your employer says, “We can’t possibly deviate from our summary plan description.” I’m telling you that employers do that all the time. The reason why they do that is because the value of the waiver and release that the employer is requiring, remember the string attached that we talked about earlier, depending on what your legal claims are, it may be worth more to that employer to get you to sign that waiver and release than if you were just a run of the mill person who was displaced without any legal claims.

Robert Ingalls: 04:26 Now, if this is a smaller company, how does that process differ?

Josh Van Kampen: 04:30 Most smaller companies don’t have formal severance plans, and so they would take more of an ad hoc approach. Sometimes that’s helpful, because it actually gets out from under this argument where they’re saying, “Well, we can’t deviate from our past practice,” because there isn’t any governing document. The other thing is these small businesses, even though there’s no past precedent they need to follow under their plan, they still can’t discriminate against you.

Josh Van Kampen: 04:59 Let’s say that the white executives who were displaced from a small business always got six months severance packages, but then an African American executive gets displaced and they offer him three months. Even though there’s no severance plan, per se, under this ERISA statute like we talked about, that small or medium size business still can’t discriminate against somebody because of their race or their sex or their religion, or that sort of thing, in the amount that they pay in severance.

Robert Ingalls: 05:28 Got you. Now, let’s talk time frames to sign severance agreements. Why do some severance plans allow for, say, 21 days to consider, and then others may have shorter time frames?

Josh Van Kampen: 05:40 I know everybody is always wondering, “Where does this 21 day period come from?” It comes from a statute called the Older Worker Benefit Protection Act. I’m a little offended by this statute, because it assumes that people over 40 need more time.

Robert Ingalls: 05:56 Got to really think about that.

Josh Van Kampen: 05:57 They really need to think about it, because they’re infirm. The law requires that if you’re over 40 that you be given 21 days, calendar days to consider a severance offer. Now, that 21 days can actually expand to 45 days if you’ve been displaced as part of a group layoff. In which case you get a full 45 calendar days. Then the other requirement that’s nice from the Older Worker Benefit Protection Act is if you’re displaced as a group layoff, you’re entitled to know the ages and number of people in your job classifications so that you can compare who was retained and who was displaced. That’s a really nice feature.

Josh Van Kampen: 06:43 Then finally that statute also allows you to revoke. Let’s say you signed within your 21 days. You realized you were foolish for doing so. You can actually revoke if you provide a written notification that you want to revoke within five business days of your signing.

Robert Ingalls: 07:02 Now, what happens if the employer doesn’t give you the required time?

Josh Van Kampen: 07:05 You get to keep your money, the money that they paid you and you can still sue them for age discrimination.

Robert Ingalls: 07:12 That sounds like the win-win.

Josh Van Kampen: 07:13 It’s a win-win. In a way you feel a little bad. You’re like, “Well, jeez. I did accept the severance. I signed a piece of paper that I wouldn’t sue.” On a technicality, that waiver as to the age discrimination wasn’t enforceable, you can then sue. Now, the employer if you win in trial, the employer’s going to take as a credit the severance that was paid to you in the first place, but you can still bring suit. The bad news is the waiver that you signed as to other kinds of discrimination like race discrimination or sex discrimination, that waiver that you signed is still effective for those other claims, but your age discrimination claim survives.

Robert Ingalls: 07:56 Got you. Now, I know that frequently severance agreements tend to be uniform, but do you ever come across provisions in any of the severance agreements you’ve seen that give you pause or would make you say, “No. We’re definitely not signing this”?

Josh Van Kampen: 08:08 Yeah. We encounter a lot of these provisions in almost every severance agreement. Really, can you blame the employer? They’re thinking, “Well, if we can get away with these draconian measures or what would normally be poison pills in agreements, let’s get them.” They try. A couple that we want to be really wary of, the first of which is a cutoff for severance. In a normal severance agreement, you get your severance regardless of whether you get a new job within the six month period they were paying you, for example.

Josh Van Kampen: 08:43 Increasingly I’m seeing employers insert provisions that if you get a job in a shorter increment of time, say three months within that six month period, that it cuts off your severance. That’s not fair, because you obviously would have worked for that company for a long time to have earned that severance. You shouldn’t be penalized by receiving less severance because you did a good job and got a new job sooner. We routinely will go to the mat on a provision like that and have our clients refuse to sign it. That one is not standard, and so the overwhelming majority of time the employer will back off of that sort of provision.

Robert Ingalls: 09:26 Got you.

Josh Van Kampen: 09:28 Another one that rubs me the wrong way, what I call a draconian enforcement provision. You’re likely to have a non-disparagement provision in your severance agreement. You can’t say anything bad about the company. Let’s say you had a few too many drinks one night at the Wooden Robot Brewery, my favorite brewery in Charlotte. You ran your mouth and you said something bad about your boss or the company to your buddy, and it was overheard by a secretary from the company.

Josh Van Kampen: 09:57 The way that provisions are often written in these severance agreements, they could say that you breached your non-disparagement provision, and the contract may allow them to cut off your severance benefits if you disparage the company, or to sue you to recover all the money that they paid you because you breached the non-disparagement provision.

Robert Ingalls: 10:17 Now, at that point that’s the employer playing judge and jury. Let’s say this happens, that situation occurs and they cut off your severance. At that point do you have the ability to file suit over this?

Josh Van Kampen: 10:32 That’s what I get so bothered about this. It’s like the employer should not be able to determine whether or not you’ve breached and then turn off the spigot. The employer should have to go down to the courthouse and convince a judge that you breached, to turn off the spigot. Because obviously the employer has a financial incentive to turn it off. We’ll routinely push back on such a provision and say, “Well, employer, sure, you can turn off the spigot, but you got to prove there was a breach, and you got to go down to the courthouse to do it.”

Robert Ingalls: 11:04 Are there any other provisions you see that are heavily one-sided in favor of the employer?

Josh Van Kampen: 11:10 I call it robbing Peter to pay Paul. Let’s say that during the employee’s employment they never signed a non-compete agreement. All of a sudden you’re laid off. They’re going to pay you six months pay in severance, but they want you to sign a one-year non-compete. First of all, they’re not paying you your severance, so why would you agree to a year non-compete when they’re only paying you for six months? Furthermore, why would you want to on board that kind of restriction or obligation when you didn’t have it while you were a worker for the company?

Josh Van Kampen: 11:42 We routinely just mark out any new non-compete obligation, unless the company wants to pay your severance, then we say, “You got a deal.” It’s usually a pretty good bargain for a client at that point.

Robert Ingalls: 11:57 We covered provisions that the employer may try to add in there. Are there provisions that you like adding to these agreements for your clients?

Josh Van Kampen: 12:05 Yeah. One thing that makes me nervous for folks is let’s say you were lucky enough to have a six-month or eight-month severance package, and it’s paid out over eight months. That is exposure that you have that the company could be sold, could go out of business, could manufacture some BS argument that you breached your obligations and turn off the spigot, and then now you’re having to go to court to try to turn the spigot back on. The safest way to handle that is to get a lump sum payment upfront.

Josh Van Kampen: 12:35 Now, sure, you might be paying more taxes because it’s a bigger paycheck up front, but come tax time, so you get a refund because you overpaid. But most importantly you don’t have the risk that those payments could stop. That’s one example. The other thing that’s ridiculous, too, is they want to muzzle you. The employer wants to muzzle you and say, “You can’t disparage and say anything negative about your managers or the company,” but they can say whatever the heck they want to about you.

Josh Van Kampen: 13:04 We’re always saying, “Look, we can live with a non-disparagement provision but it’s got to be mutual.” Now, most companies are not going to agree to bind a corporation because they can’t police every single person. It reasonable for the listener to go to the human resources department and say, “Well, at least let me identify three or four people.” Because you can certainly control what three or four people are going to say during their employment. Oftentimes, if you limit it to a finite number of folks, then the employer will agree to it.

Josh Van Kampen: 13:39 Their fallback, most employers try to get it away with saying, “Well, we’ll agree to instruct these individuals not to disparage you.” But, guess what, that instruction is meaningless. You can’t sue them because they disparaged you if the employer’s only obligation was an instruction. You want to go to the mat and have an actual agreement not to disparage, not an instruction.

Robert Ingalls: 14:01 Do you put anything in there about references? Because I know that’s one that comes up a lot. People are worried that when they leave this job, the next thing they’re doing is job hunting, and they’re concerned about what that reference is going to look like. Does that get included in any of the agreements?

Josh Van Kampen: 14:15 99% of employers any more have a neutral employment reference policy. Guess what, you can’t sue them for breaching a policy after you’ve been fired. It’s not enforceable. You want to have the neutral employment reference provision in the contract, because then you can sue for a breach of contract. You can’t sue for a breach of a policy. You definitely want to fight to have a neutral employment reference provision in the agreement.

Josh Van Kampen: 14:42 Also though, you want to make sure, let’s say you did hire an attorney and the attorney asserted potential legal claims against the employer. You don’t want the employer to be able to run their mouth about your having hired a lawyer or threatened legal claims. In that instance, we’re going to want to insert language that says that if they are contacted for a reference by a prospective employer, that they’re not allowed to reference that you hired an attorney or threatened legal claims.

Robert Ingalls: 15:11 Sure. Do you address unemployment in any of these severance agreements, like if an employee decides they want to apply for unemployment? Has this come up?

Josh Van Kampen: 15:20 You definitely want an agreement not to contest your unemployment application in the provision. Normally employers are going to agree to that. If you don’t have that in there then, and they want to be jackasses, they could then contest your unemployment and possibly negate your unemployment benefits. You want to make sure that you’re on the same page with your employer that they’re not going to do that.

Robert Ingalls: 15:44 Sure. How does severance come into play with unemployment? Does that affect your potential unemployment?

Josh Van Kampen: 15:49 Yeah. You got to be careful, because at least in North Carolina and probably in most states you’re not allowed to collect unemployment while you’re also receiving severance, because you don’t have a loss.

Robert Ingalls: 16:00 Kind of double dipping.

Josh Van Kampen: 16:01 It’s double dipping. The safest thing to do is, if you’re receiving severance, not to apply for unemployment until your severance has been paid. Because you’re absolutely not qualified to receive unemployment while you’re also receiving severance.

Robert Ingalls: 16:15 Sure. Is there any other provisions?

Josh Van Kampen: 16:19 Another thing that folks are sometimes concerned with is how is the separation classified internally. Most folks don’t want to have to describe or explain a termination in a job interview. You can use the opportunity in a severance agreement to classify a separation as being voluntary, or as being mutual, or as being a job elimination or another option is to say a non performance-based termination. That way you can avoid those uncomfortable conversations in a job interview.

Robert Ingalls: 16:57 Is there any discussion ever about giving a positive reference?

Josh Van Kampen: 17:01 I don’t know why they never agree to that. Where I’m in a mediation or whatever, I’m like, “Come on. Write my client a letter. It costs you nothing.” I’d say about 85% of the time they just draw a line in the sand and say, “No.” For listeners, the best way to get around that is to not ask for that officially in the severance negotiations. If you’ve got a good relationship with your boss, under the radar your boss may give you a positive reference letter.

Josh Van Kampen: 17:32 If you push for it in the formal negotiations on severance, you’re going to get the no. I’m telling you, you’re going to get the no, and now your boss who might have given you an under the table positive reference might be scared off from doing so.

Robert Ingalls: 17:46 Got you. Earlier we talked about negotiating severance. What are the pros and cons of negotiating for a higher number?

Josh Van Kampen: 17:56 Well, the con is, at least in North Carolina, so when you make a counteroffer to a severance offer, it operates as a rejection of the offer. They’re not required to put that original offer on the table when you make a counteroffer. Now, in my negotiations especially because of the style that I have which is diplomatic and approaching this as a problem to solve, not banging on tables, I always tell my clients that I have little to no concern that an offer is going to be pulled because we made a counteroffer, just because of how we do it. In theory, when you make a counteroffer it can be rejected.

Josh Van Kampen: 18:38 The other thing that can be a little nerve-wracking for clients is that it’s very unlikely that we’re going to get your severance agreement enhanced within 21 days. You got this blinking light, at 21 days you have to sign this or they’re not going to have it on the table. Well, I can tell you that 95% of the time employers are still willing to pay you that original package regardless of whether 21 days went by, because they’re not offering it to you out of the goodness of their heart. It’s a business decision. They want you to sign that waiver and release.

Josh Van Kampen: 19:13 We just blow right by that 21 days, and I don’t ask for an extension. Don’t ask for an extension, because then they’re going to know that you’re worried about it being pulled. You’ve just got to be a cool cucumber, act like you don’t care, and trust your lawyer when he says, “Don’t worry. With the approach that we have and our history, just let me go by those 21 days. You’re going to be all right.” I’ve only had one matter in the 20-something years of doing this where I had an offer pulled, and that was just because the other lawyer was batshit crazy.

Robert Ingalls: 19:51 These things happen. It sounds like it lets the other lawyer or the company know that you know the ball’s in your court.

Josh Van Kampen: 19:57 Correct. Also, for them, they need to know my client’s not signing that.

Robert Ingalls: 20:04 How do I know what the value of my claim is? I know every case is going to be different, but in general.

Josh Van Kampen: 20:09 Well, it goes back to that string that was attached. What legal claims do you have that you’re waiving in exchange for the severance offer? On that one, sorry to say to our listeners, you’re just not qualified to be able to assess what your legal claims are worth. You should consult with an employment attorney. You should talk to an employment attorney anyway, even if you don’t think you have a claim, because there are these, remember these provisions that I said should be poison pills that you’re going to want to change. You should have a lawyer to go over your severance contract to begin with.

Josh Van Kampen: 20:43 While you’re at it, then you want the lawyer to tell you what are my legal claims, what are they worth. That is measured on two axes. One is what is your likelihood of prevailing in the case. What is your likelihood that you’re going to win? Then secondly, if you win your lawsuit, what are you likely to recover? Actually I think the next podcast we’re going to address the different kind of damages that you can recover in a lawsuit. Your lawyer’s going to tell you on the axes what you’re looking at.

Josh Van Kampen: 21:15 For me a lot of it is gut feel. I’ll go into the negotiations with the company with an idea of what I think our client should offer, but I never make an offer on my client’s behalf until I’ve had an initial phone call or even two phone calls with the company lawyer. Because I am dipping my toe in that water. I’m paying attention to his tone, everything he says. Because what I want to do for my client is we want to ask for as much money as we can possibly ask for, but without being detrimental and shooting ourselves in the foot.

Josh Van Kampen: 21:48 That’s why we never make an offer right out of the gates, because I want to have every single data point I can possibly think of. Now, the wildcard in severance negotiations, as well as, regardless of what you can recover in court, what leverage do you have. A lot of times our clients may know where the proverbial skeleton is hidden in the closet. Even though they’re legal claims, lets just say they’re B legal claims, they may have A-plus leverage. We would be foolish not to factor in all the leverage points, legal and non-legal, in trying to get our clients the best deal we can.

Robert Ingalls: 22:25 Sure. Tell me about the approach that Van Kampen Law takes to severance negotiations. When I walk in the door, I sit down and we start working together. What can I expect?

Josh Van Kampen: 22:35 Well, believe it or not, in an hour we’re able to complete a severance review. We’ve just done so many of them over the years and have a pretty good gut feel of whether or not we think that there’s a good opportunity to enhance a severance package. You have to remember that we’re trying to get a company to voluntarily sign a check. If you hire a lawyer who’s nothing but fire and brimstone, that’s not the lawyer you want in a severance negotiation setting, because he’s going to probably do more harm than good, and put them in the corner of the room when you’re trying to get them to meet you at a table.

Josh Van Kampen: 23:15 Approaches is really key, but you still need to be, on the one hand you’re extending an olive branch, but in the other hand you have to have a fist cocked, because they’re not going to give you a good deal because your lawyer was a nice guy. They also have to understand that you hired a trial attorney, an attorney who files a lot of lawsuits that isn’t bluffing. That’s why it’s really important to make sure that you hire a litigator if you’re trying to enhance your severance package and not just a run of the mill civil attorney.

Robert Ingalls: 23:49 Got you. Was there any last words on this subject you want to talk about?

Josh Van Kampen: 23:53 Just final thoughts in terms of pitfalls to avoid. Understand that your severance offer is highly confidential. There was actually an instance where there were negotiations around a severance, or a settlement. We may have talked about it before in a previous podcast, where the daughter of the executive got on social media and bragged about how the family was now going to go on a trip to, I don’t know, some extravagant place, and then made some flippant remark about the employer. In that instance, the severance was lost.

Josh Van Kampen: 24:31 Right off the bat, if you’re in severance negotiations and offers are going back and forth, if you’re represented by counsel or not, each one of those offers you have to treat like a family secret. Don’t leave your severance agreement sitting on the kitchen table. Certainly don’t bring it to the coffee shop, because you’re going to end up throwing away what could be a really good deal for yourself and your family.

Robert Ingalls: 24:52 Got you. Well, thanks Josh.

Josh Van Kampen: 24:54 You’re welcome. Thanks everybody.

Intro: 24:57 Congratulations for taking an important initial step in turning the tables at work. This podcast is just an educational resource. It does not constitute legal advice and is no substitute for consulting an employment attorney about your unique situation before making legal decisions. Visit our website for more online resources and videos at ncemploymentattorneys.com. Better yet, call 704 247 3245 for a free initial intake interview, so Van Kampen Law can evaluate your case. Until next time, keep your head up and your wits about you.