Negotiating a New Job in the Midst of a Pandemic

Protect Yourself

You’re a manager or low- to mid-level executive currently employed at a large, stable company. Your career is a bit stalled and you are considering an offer to join an exciting new business that promises you a speedy career trajectory, higher pay, and other long-term rewards such as ground-floor equity in a well-funded business entering a promisng market.

So long as you’ve done your due diligence - ascertaining the funding of the new venture, investigating the bona fides of founders and management, and examining the profitability projections that landed the founders their venture capital - you might well decide to jump from Unexciting but Stable Job to Exciting and Promising New Venture.

In ordinary times.

But these are not ordinary times. We’re facing an unprecedented world-wide economic cataclysm, the severity and duration of which no one can predict. For most of us, it’s definitely a time to hold on to the most stable source of income we have. If you, however, cannot resist the siren call of start-up culture, you can and should ask for protection from possible job loss as the result of the unpredictable markeplace.

How do I do that?

Consider Negotiating a Pre-Termination Severance Agreement

Many businesses make an effort to stay afloat despite business reverses by laying off employees who, in their absence, would otherwise be working. If you are considering joining a start-up or other company that might have to cut back its staff in these perilous times, consider negotiating a pre-layoff severance agreement. Such agreements are routinely offered “up front” to key employees and senior executives. Rarely are they offered to managers or lower level executives. But we’ve left the world of “routine” and need to protect ourselves.

Were I looking for employment with a newly established company today, I’d make an effort to get an up front severance provision included in my employment contract. Even though it’s unusual for lower level managers and executives, it’s far from revolutionary. Companies routinely offer even low level employees severance agreements at the time of termination because they want to get what the laid off employee has to give - an agreement not to sue. Why not ask for an agreed upon severance provision up front in exchange for the release of claims your new employer would surely seek if it terminated you later?

One law firm strongly urges senior executives to do just that as follows:

Even though . . . . you[r new employer] can let go at any time, you are making a major commitment to go with the company by leaving your current position, and so the new company must make a commitment to you. If they choose to terminate you without cause, they should provide suitable severance. For most CEOs, that severance compensation is at least one year’s salary.

Since you’re not likely vying for the CEO position, a year would be over-reaching, but six months would not. Start at six and negotiate down to three. Hopefully, that would give you the breathing room to find new employment. We here at She Negotiates write scripts for these kind of “asks.” If you’d like to learn more about our services, book a Hundred Buck Hour and see what we can do together.

And if you’d like to know what your options will be in case your employer goes bankrupt, see this excellent advice from the New York City Bar Association.