To start, let’s say you were just fired. It may actually be possible to save your job. Let’s see what you can do.
If you have been fired for a clear cause, it may be difficult to save your job. But if the reasons are unclear, if you aren’t an at-will employee or if you are subject to a layoff or downsizing, it may be possible to hang on to your job, if only for a little while. First, consult your employee handbook or personnel manual. Find out if there is an official grievance process you can pursue and who can reinstate you. If filing a grievance, make sure you do it promptly within the required period of time. Union employees generally have a great advantage here as they have clearly defined appeal procedures, and union officials can offer help and representation.
Contact the person highest up the chain of command but within reason. Approaching the manager of your department may be a wise move, but e-mailing the CEO of the multinational corporation that just fired you is likely not. As in all matters related to losing your job, do your best to remain composed and respectful.
If you are desperate to stay employed to retain benefits, achieve a retirement or pension threshold or to have a source of income while looking for a new job, consider offering to do part-time, contract or temporary work. You could also offer to accept a smaller pay package. If your firing was based on poor performance, ask if you can resume work on a probationary basis. In the case of a downsizing or corporate restructuring, requesting to transfer to a different office or to fill a different position may allow you to stay employed.
Getting Fired
The majority of American workers are “at-will” employees, meaning that they can be fired at any time without being offered a reason, so long as the firing is not discriminatory or illegal. At-will employees can also quit at any time -- though offering two weeks notice is considered standard decorum -- because they are not legally bound to work for their employer. If you have a contract, such as a union contract, then you are likely not an at-will employee and can only be terminated in circumstances that fall under the terms of the contract. Federal employees are not considered at-will but rather are protected from termination that violates the U.S. Constitution or their state’s constitution.
Whether you’re an at-will employee or a union employee, certain aspects of getting fired are the same, and there are some guidelines that you should follow. Most importantly, be careful what you do and say. Getting fired can be a very distressing time. Don’t use it as an excuse to tell off those coworkers who have annoyed you or to launch into a rant against the company. Although it may not seem like it, you may end up working with some of these people again one day or encountering them in a professional setting. Depending on the circumstances of your firing, you may also want to ask some of your coworkers or a former supervisor for a reference, a request that will be made much more complicated by a tumultuous exit.
If you are fired, be careful with any documents that you’re asked to sign, such as a release of claims that gives up your right to sue. Read them carefully, and feel free to consult outside sources or a lawyer. Most importantly, do not succumb to pressure.
You should also take this opportunity to look at any documents that you signed when you were hired that may affect future employment opportunities. These documents can include restrictive covenants, non-compete agreements or confidentiality agreements. If, for example, the non-compete agreement you signed bars you from working for a competitor for six months after leaving the company, read over the agreement carefully to see if there are any changes in its provisions if you are fired.
You may also receive a summary of your retirement plan and its status. These documents can be useful if you plan to roll your retirement account into a new plan with a future employer.
Whether your firing is dramatic and bitter or quiet and amicable, keep a record of events related to your job loss. You might need this information for collecting unemployment, filing a grievance or a lawsuit, or in settling a dispute about your severance package. Maintain a chronology of events so that you do not have to rely on your memory to support your version of events.
You should receive your final paycheck within 30 days of your final work day, though state laws on this matter vary. Your company may be bound to a different timeframe depending on whether you were fired or you resigned. If your employer does not give you your final pay within the legally required timeframe, contact a lawyer, your union or a government agency such as the Wage-Hour Division, part of the Department of Labor.
Severance, Golden Parachutes and Reference Letters
When an employee is fired or laid off, he or she may be offered a severance or separation package. This package can be a combination of salary, a lump sum of cash, stock options or other benefits. It is designed to thank terminated employees for their work and to ease their transitions to new jobs. The amount of severance pay offered depends on the position held, length of service with the company, service record and the reason for termination. Some terminated employees manage to negotiate for more severance money based on these factors or by giving up the right to sue.
Some companies have written severance policies while others propose a different package for each individual. A severance package could equal a year’s worth of pay or much less, but almost everything received as part of a severance is taxable.
An employee may continue to receive a salary or get a lump sum in his severance package. A lump sum payment is just what it sounds like - you get all the money agreed upon in your severance package in one lump payment. This has some key advantages, including a clean break from your employer; there’s no need for continued correspondence because you’ll have your money. However, an employee’s other benefits, such as health insurance, will cease once he gets a lump sum.
Salary continuation means that the terminated employee stays on the payroll and is paid every pay period as if still an employee. According to the agreement, the salary continuation may last for a set period or until the former employee finds a new job. The ex-employee also retains benefits when on salary continuation, again because he or she is still on the payroll and is treated in many ways like an employee (albeit one who no longer shows up for work). A similar method to salary continuation, but one with clear disadvantages, is periodic payments, in which the terminated employee receives several equal payments over time. The former employee is not officially on the company’s payroll, meaning that there is less oversight, potentially no financial record and uncertainty about how missed payments can be requested or recovered.
If given the choice between a lump sum, salary continuation or periodic payments, keep in mind the amount of money offered compared to your needs and how long it might take you to get a new job.
Golden Parachutes
Also called golden handshakes or change-in-control payments, a golden parachute is a large sum of money -- or a combination of cash, stock options, consulting contracts and other benefits -- to be paid to one or more executives in the event of a takeover or change in ownership of a company. The practice became popular in the 1980s, and now golden parachute arrangements are in place for almost 80 percent of companies in the S&P 500 [ref]. Golden parachutes were initially intended to guarantee compensation to an executive should he or she be fired after a merger or takeover. Now some CEOs get large pay packages in mergers and still remain in control of the new company. An example is former Gillette CEO James Kilts, who received a $165 million pay package after orchestrating the sale of Gillette to Procter & Gamble in 2005. He was particularly criticized by members of the Boston media, where Gillette was based; critics claimed he benefited financially at the expense of shareholders and the 6,000 jobs that were cut from the combined company.
Some executives also receive golden handshake-type severance packages when they resign. In January 2007, Home Depot CEO Bob Nardelli resigned and received a severance package worth roughly $210 million. However, other executives have declined opportunities to receive large payouts, claiming that their regular compensation is sufficient and that executives should match company performance and align with shareholders’ interests [ref].
Severance payments more than 2.99 times an executive’s average annual compensation are subject to a 20 percent tax, but further regulation and government oversight may happen in the future. Some shareholder groups have begun lobbying to allow shareholders a greater say in executive compensation, and many companies are responding, usually by allowing their stockholders to submit non-binding resolutions on executive pay.
References
Though letters of reference may be one of the last things on your mind when you’re fired, this is actually the best time to consider them. Of course, obtaining a letter of reference can depend on the circumstances of your termination, but not putting down a past employer as a reference will be taken as a bad sign by prospective employers. If you are unhappy with a reference letter, you can try to discuss it with the writer.
You can also request a service letter explaining the reasons for your termination. A service letter is required by law upon request in California, Maine, Minnesota, Missouri, Montana, Nebraska, Nevada, Oklahoma and Washington. If unable to obtain a service letter, ask your supervisor for the reason behind your termination and write it down. Include the date, time, place and any witnesses. Read the letter to your supervisor and ask him to confirm its content.
Quitting a Job
If job termination seems imminent, it can be better to resign. Your record with the company will say that you quit, and you can tell prospective employers that you left your last job voluntarily. Additionally, if you hope to return to your company one day, perhaps in a different position or department, you may be barred from being rehired if the company’s records shows you were fired.
It’s a good idea to talk to an employment lawyer before resigning and to read all applicable company documents. If your employer wants you to quit but has no legal reason to fire you, perhaps he or she is trying to force you to quit. You could pursue legal action instead, try to obtain a favorable separation package or file a grievance with the company or your union. If suffering from discrimination, try to stay at your job and file a complaint with the Equal Employment Opportunity Commission (EEOC). If possible, report the discriminatory behavior to a supervisor. You are legally protected from retaliation for filing with the EEOC.
If you’re just dealing with general unhappiness or restlessness with your job, it’s better to hold on to the job and look for a new one while you’re still employed.
If you do decide to resign, do so in writing, and give at least two weeks notice. Continue fulfilling your responsibilities until your very last day of work. Don’t take anything that doesn’t belong to you or that could be considered cause to withhold your final pay. Leave your files and other materials in order to facilitate your successor’s transition. Look at the employee handbook to see if you’re entitled to any benefits or compensation for unused vacation or sick time.
Some companies ask employees who are leaving to do exit interviews. Be careful during this interview -- using it as a forum to list all of your grievances or to complain about specific employees or supervisors could backfire later in your career. You may be working with some of these people in the future, asking them or their colleagues for references or encountering them in another situation.
Dealing With Job Loss
Losing a job can be one of the most stressful experiences a person goes through, especially if you're concerned about supporting a family. Try to maintain your perspective through this process, and use your available support system -- friends, family and mentors. Don’t close yourself off to them; now is a time to ask for help. You should also start looking for a new job immediately, consulting professional contacts, friends and former employers. Your old employer may provide access to outplacement services to aid you in your job search.
When not looking for a job, stay active. Maintain hobbies and social activities. An active routine is good for maintaining mental health. Try using your job skills in a volunteer setting. You’ll be doing good for others, keeping your skills sharp, staying busy and feeling good in the process. You can also learn new skills and meet new people, which may lead to a job.
Be particularly careful with your finances during this time. Create a budget with your family, and stick to it. If you have debt, figure out how you’re going to afford your payments. If you think you may run into trouble, consult a consumer credit counseling agency.
Finally, take care of your mental and physical health. Eat well and exercise to stay fit and lower stress. Get proper sleep, and stay away from drugs and alcohol. You can also join a support group, keep a journal or seek counseling. Most of all, take time to enjoy yourself (while keeping your budget in mind), and stay determined in your job search, following up on every possible lead.
Wrongful Termination
The ACLU estimates that 150,000 people are wrongfully terminated each year in the United States [ACLU]. Wrongful termination is an allegation that an employee was fired without proper cause or on discriminatory grounds. Many such allegations result in wrongful termination or wrongful discharge lawsuits, in which plaintiffs often sue for lost wages, compensatory damages, attorney’s fees, punitive damages, reinstatement or required reasonable accommodations.
There are many potential reasons for a wrongful termination suit. If an employee is fired under any of the following circumstances, he or she may decide to sue:
- Before the end of a contract
- Reporting a supervisor or “whistleblowing”
- Refusing to do something illegal or to work in illegal conditions
- For reasons that appear to violate federal or state anti-discrimination laws
- Taking time off to vote or perform military service
- Without receiving sufficient warning prior to termination, as specified in the employee’s contract or personnel handbook
- Refusing to submit to a lie detector test
- Complaining about OSHA violations or unsafe working conditions
The Immigration Reform and Control Act bars most employers from terminating an employee based on alien status, as long as that person is legally allowed to work in the U.S.
Whether considering a wrongful termination suit for one of the above reasons or any other, it’s best to consult an employment lawyer.
Unemployment Insurance
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Each state has its own system of Unemployment Insurance (UI) that provides benefits to those who qualify. The main rule with collecting UI benefits is that you must be ready, able and willing to work. Most states allow you to apply online or by phone. If you’re in a union, they may be able to help you or assign you a representative dealing with Unemployment Insurance. Generally, you should apply for UI benefits immediately after losing your job. Usually you won’t be offered benefits retroactively -- despite your unemployment status and UI eligibility -- so it’s best to apply as early as possible.
The UI application will require you to fill out a variety of personal information, including contact numbers, home address, social security number and contact information for employers during the previous 18 months.
In the application, be honest about why you are unemployed. If the unemployment commission determines you lied, you can be penalized or even charged with a crime. For that reason, truthfully state why you were fired and lost your job, and if possible, mention how you tried to correct the situation or to maintain your job. If you disagree with the reason why you were fired or with some accusation your employer made, specify that in your initial application. You may be asked more detailed questions by someone from the Unemployment Insurance system after your initial application is received.
If you quit your job, you may not be eligible for UI benefits. But if you quit for “good cause” -- some grievance or incident that would cause someone to quit -- then you may be eligible. For example, unsafe working conditions, an employer refusing to pay wages, abuse or harassment, a request by an employer to do something illegal or a significant demotion may all constitute good cause, but you must give the employer a chance to remedy the situation before quitting. If covered by a collective bargaining agreement (CBA), you should ask your union whether refusing to work under those conditions is allowed under the agreement and if they can help with the situation. (A CBA is a negotiated agreement between a labor union and an employer that sets terms of employment for members of that union and provisions for wages, vacation, hours, working conditions, health insurance, benefits, etc.)
If you quit for certain personal reasons, such as taking care of a baby or sick relative or moving to a new city to be with a spouse, you may be eligible for UI benefits, but you still must be ready, willing and able to work. If medical problems caused you to quit, you may still be able to collect UI benefits if you are able to do light work or to work in a related field.
If you were a part-time employee or had your full-time job reduced to a part-time job, you may be able to collect at least partial benefits.
There are various reasons for termination that can affect your ability to collect UI benefits. Each case is different; even if your employer cites a rules violation as reason for your firing, you may still qualify for UI benefits. Different standards are employed among the states that may make those fired for “just cause” or “willful misconduct” ineligible for benefits. Those standards can be defined as follows:
- “Just cause” - disobeying company rules, bad job performance
- “Willful misconduct” - deliberate violation of employer’s rules, consistently missing work or arriving late, violating standards of behavior
- “Faultless termination” - company downsized or position was eliminated; no wrongdoing on the part of the employee
States that use the willful misconduct standard are considered more lenient, as they allow those who were fired with just cause -- meaning for disobeying a rule or poor performance -- to still collect UI benefits. In any case, there’s no real downside to filing for benefits, and you can appeal a claim that is denied or contested by your employer.
Once you are receiving UI benefits, you will have to continue filing the necessary paperwork and claims weekly or bi-weekly, depending on what’s required by your state’s unemployment commission. You will also have to show that you’re actively seeking work, usually by checking in with a UI representative. Keep copies of your resume, job applications and interview schedule as proof that you’re engaged in a job search. If you have any questions about your UI benefits or the application process, contact your state’s unemployment commission.
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