If you’ve been offered a severance package—or expect to be—you may be wondering how to respond. A severance pay demand letter is a formal written request in which an employee outlines their concerns with the severance offer, identifies unfair terms, and proposes a revised agreement. This letter serves as a negotiation tool, giving employees a chance to push for better compensation, extended benefits, or fairer terms before signing away their rights.
Many California employers handle severance negotiations regularly, often with experienced HR professionals and legal teams guiding them. Employees, however, typically have little to no experience with these agreements and may not recognize the leverage they hold. Employers often structure severance offers to protect their own interests—minimizing payouts, limiting future legal claims, and discouraging counter offers. That’s exactly why a well-crafted demand letter is essential: the initial severance offer is rarely the best deal you can get.
Matt Ruggles has been litigating employment law claims in California for more than 30 years, including negotiating hundreds of severance agreements from both sides of the table. . He knows how to level the playing field and ensure employees aren’t taken advantage of in these high-stakes negotiations.
This blog outlines ten key principles for writing an effective severance pay demand letter—helping you take control of the negotiation and push for the severance you deserve, not just what your employer hopes you’ll accept.
Principle #1: Shorter is Better Than Longer
When it comes to severance negotiations and your initial demand letter, less is more. A demand letter should be clear, direct, and concise—ideally no more than one or two pages.
Employers and their legal teams do not read lengthy, emotional narratives. A demand letter that rambles or tries to explain every detail dilutes your leverage and gives the employer more material to scrutinize and push back against. Decision-makers are busy, and if they have to sift through pages of complaints, they may dismiss the letter outright and unreasonable, uninformed and weak.
Instead, the letter should quickly establish key facts, highlight your strongest legal claims, and make a specific, reasonable demand. The goal is to initiate negotiations, not argue your full case in writing.
A well-structured demand letter should:
- Lead with your strongest claims – the best one or two points, or a main point and a subordinate point. In order for your letter to be effective, it must be read and understood.
- Include only essential supporting details—enough to show you are serious but not so much that the employer can preemptively undermine your arguments.
- Maintain a firm but cooperative tone, signaling that you are open to resolution without unnecessary conflict. Don’t overdo it and say you have an attorney when you don’t, or that you intend to file a class action lawsuit – no one believes that sort of puffery.
Principle #2: Focus on Facts, Not Implications
A severance demand letter should present clear, objective facts rather than assumptions about an employer’s motives or emotional arguments. Facts create leverage—speculation weakens it.
Employers and their legal teams evaluate severance demands based on potential legal exposure and financial risks. A letter that focuses on solid, provable facts forces the employer to take the demand seriously. On the other hand, making accusations without evidence—such as claiming discrimination without supporting details—can undermine credibility and give the employer an easy way to dismiss the request.
How to Keep It Fact-Based
- State what happened, not why you think it happened. Instead of saying,
- “I was fired because my manager wanted to get rid of older employees,”
- Say: “I was terminated despite having strong performance reviews, while younger, less-experienced employees in the same role remained employed.”
- Use dates, numbers, and company policies to support your claim. If your employer violated a specific policy or practice, cite it.
- Avoid emotional language. Phrases like “I was treated unfairly” or “This is unethical” are not legally compelling.
- Do not include unnecessary personal details. Keep the letter professional and business-like, just as you would expect from the employer.
Example of Fact-Based Writing vs. Implication-Based Writing
- Implication-Based: “It’s obvious I was let go as retaliation for speaking up.”
- Fact-Based: “On [date], I reported concerns about [issue] to [HR/supervisor]. Less than [X weeks/months] later, I was placed on a PIP and terminated, despite no prior performance concerns.”
Principle #3: Identify Strongest and Second Strongest Claims – Don’t Use the Kitchen Sink Method
A common mistake in severance demand letters is listing every possible legal claim, hoping that sheer volume will pressure the employer into offering a better deal. In reality, this weakens your position by diluting your strongest arguments and making it easier for the employer to dismiss your letter.
Employers assess severance demands based on legal and financial risk. When they see a demand letter overloaded with weak or speculative claims, they are more likely to assume you lack a strong case and ignore your request. A demand letter that focuses on one or two well-supported claims carries much more weight and forces the employer to take negotiations seriously.
How to Choose the Right Claims
- Identify the claim with the most legal merit and supporting evidence. A clear violation of law or company policy is far more compelling than vague complaints about workplace treatment.
- Strong claim example: You were terminated immediately after filing a formal complaint about unpaid overtime, and you have emails showing your employer was aware of your complaint.
- Weak claim example: You feel like your manager treated you unfairly compared to your coworkers, but you have no documentation or pattern of discrimination.
- Select a second strong claim if applicable. A backup claim can strengthen your argument, but only if it is solid and well-documented.
- Strong secondary claim example: You were terminated after returning from medical leave, and you have evidence that your employer permanently replaced you with someone else while you were out.
- Weak secondary claim example: You believe your employer didn’t like you personally and that played a role in your termination, but you have no concrete evidence to support it.
- Leave out weaker claims. Weak claims distract from your strongest arguments and can give the employer an excuse to ignore the demand.
- Example of a claim to leave out: Alleging a toxic work environment because your boss was rude or difficult to work with—unless it involved illegal harassment or discrimination.
Example of Effective vs. Ineffective Approaches
- Ineffective Kitchen Sink Approach (Too Many Claims): “I was subjected to discrimination, harassment, retaliation, wrongful termination, unfair performance reviews, contract violations, emotional distress, and a hostile work environment.”
- Effective (Focused Approach): “Following my formal complaint about unpaid wages to HR on [date], I received my first-ever negative performance review. Two months later, I was terminated despite consistently strong performance.”
A focused, strategic demand letter makes it harder for the employer to ignore your claims. Stick to your strongest arguments, provide supporting facts, and avoid cluttering your letter with weaker claims.
Principle #4: Severance Pay Demand Letter Must Be Professional and Direct
A professional, well-structured demand letter sets the tone for productive severance negotiations. Aggressive, accusatory, or inflammatory language can backfire, making the employer defensive and less likely to engage in meaningful discussions. Instead, a calm, business-like approach increases the chances of a constructive response and a better severance offer.
How to Keep It Professional and Effective
- Stick to the facts and avoid emotional language. Let the strength of your claims and supporting evidence do the work.
- Avoid threats or ultimatums. Implying that you will take legal action if the employer does not comply can stall negotiations. Instead, frame severance as a mutually beneficial resolution.
- Use clear, concise language. Overly legalistic or aggressive wording can make your letter harder to take seriously.
- Be direct about what you want. Clearly state the severance terms you are seeking and why they are reasonable.
Example of Effective vs. Ineffective Approaches
- Ineffective (Aggressive): “If you don’t increase my severance, I will file a lawsuit and expose your unlawful practices.”
- Effective (Professional & Direct): “Given the circumstances of my termination and the potential legal exposure, I believe an enhanced severance package is a fair resolution. I am open to discussing terms that work for both parties.”
Presenting yourself as a serious, professional party—not a hostile adversary—creates a higher likelihood of securing a favorable severance package.
Principle #5: Tone is Important – Help Employer Solve the Problem
Employers want to avoid legal disputes. If your demand letter presents severance as a mutually beneficial resolution, rather than a threat, they are more likely to engage in meaningful discussions. The goal is to encourage the employer to view severance as a smart business decision, not an admission of wrongdoing or a serious financial loss.
How to Set the Right Tone
- Use language that invites resolution, not conflict. Instead of positioning yourself as an adversary, present severance as a fair and practical outcome.
- Acknowledge the employer’s perspective. You don’t have to agree with them, but recognizing their concerns can encourage a more favorable response.
- Keep the door open for negotiation. Rather than making rigid demands, indicate a willingness to discuss reasonable terms.
Example of Effective vs. Ineffective Approaches
- Ineffective (Confrontational): “You treated me unfairly, and if I don’t get what I’m asking for, I will escalate this matter.”
- Effective (Solution-Oriented): “I believe a fair severance agreement is in the best interest of both parties. I’m open to discussing terms that allow us to resolve this matter amicably.”
Employers are more likely to negotiate in good faith if they see severance as a way to move forward, not a hostile demand.
Principle #6: Understand Your Potential Legal Claim and Damages
Before making a severance demand, you need a clear understanding of the financial and legal value of your claims. Employers evaluate severance offers based on risk assessment, so your demand should be grounded in what you could reasonably recover if you pursued legal action—not just what you feel is fair.
Key Factors in Assessing Damages
When calculating an appropriate severance demand, consider:
- Lost wages and benefits: Base your calculation on how long it would take to secure comparable employment, factoring in salary, health insurance, retirement contributions, and bonuses.
- Emotional distress damages: If your termination involved retaliation, discrimination, or a hostile work environment, emotional distress damages may be available, but their value depends on the severity of the situation. Ordinarily, only very serious, compelling claims of emotional distress will have the power to enhance a potential severance payment.
- Legal exposure for the employer: Employers may be willing to increase severance to avoid potential liability, bad publicity, or costly litigation.
- Litigation risks and costs: Lawsuits are expensive and time-consuming. Consider how much you would realistically recover, as well as how long and how much work it would take if you filed a claim.
How to Use This Information in Your Demand Letter
- Make a demand that is justified by your potential claims. If your claim could result in six months of lost wages and benefits, an ask in that range is reasonable whereas demanding five years’ pay without strong legal backing is not.
- Signal awareness of legal risks and settlement dynamics. A demand that acknowledges litigation uncertainty—while still demonstrating confidence in your claims—positions you as a credible negotiator.
- Avoid exaggerated or unrealistic numbers. An employer will take your demand more seriously if it is well-reasoned and based on actual damages rather than speculative or punitive amounts.
A well-calculated demand strengthens your position, makes the employer take your request seriously, and increases your chances of securing a fair and reasonable severance package.
Principle #7: Make a Reasonable Demand – Don’t Overdo It
A well-calculated severance demand increases the chances of a successful negotiation. If your demand is too high or unreasonable, the employer may dismiss it outright rather than engage in discussions.
How to Keep Your Demand Credible
- Align your request with industry norms and similar cases. Employers compare severance offers to what they typically provide in similar situations.
- Factor in your tenure and position. Higher-level employees or long-term workers may justify a more substantial severance, but the demand must still be within reason.
- Leave room for negotiation, but don’t inflate your demand unrealistically. A demand that is too aggressive can end negotiations before they start.
Principle #8: Don’t Threaten a Lawsuit
While your severance demand letter should highlight strong legal claims, explicitly threatening litigation can backfire. Employers often become defensive or shift into legal battle mode when faced with aggressive threats, making them less likely to negotiate in good faith.
Why Avoid Direct Legal Threats?
- Employers assess risk without being told to. A well-crafted letter that outlines strong legal claims already signals the potential for litigation—there’s no need to state it outright.
- A lawsuit threat can escalate tensions. Instead of encouraging resolution, it may cause the employer to dig in their heels or defer the matter to their legal team, slowing or shutting down negotiations.
- Keeping the door open to discussion increases leverage. Employers are more likely to offer a better severance package if they believe it will prevent a dispute, rather than respond to an ultimatum.
How to Phrase It Strategically
- Instead of saying: “If I don’t receive a fair severance, I will sue for wrongful termination.”
- Say: “Given the circumstances of my departure and potential legal exposure, I believe an enhanced severance package would be a fair resolution for both parties.”
By outlining legal claims without direct threats, you create leverage while keeping negotiations open, increasing your chances of securing a favorable severance package.
Principle #9: Give Them a Deadline to Respond
A clear response deadline creates a sense of urgency and keeps negotiations moving forward. Without a deadline, an employer may delay or ignore your request, hoping you lose interest or accept their initial offer.
How to Set an Effective Deadline
- Make it reasonable. A 7 to 14-day deadline is typically enough time for the employer to review and respond without feeling pressured.
- State it clearly. Avoid vague phrasing—be direct about when you expect a response.
- Frame it as a standard request, not a threat. Instead of saying, “You must respond by [date], or I will take action,” use a professional approach:
- “Please provide a response by [specific date] so we can work toward a resolution in a timely manner.”
A firm but fair deadline keeps the employer engaged and ensures they take your demand seriously. If they don’t respond, you’ll be in a better position to follow up strategically and escalate if necessary.
Principle #10: Follow Up to the Severance Pay Demand Letter
While following up isn’t part of writing the demand letter itself, it is a critical step in the overall negotiation strategy. Employers don’t always respond immediately, and it’s not uncommon for a demand letter to be delayed, deprioritized, or even ignored. A well-timed follow-up ensures your request stays on their radar.
Why Follow-Up Matters
- Employers often delay responses strategically. Some companies hope that if they stall long enough, you’ll drop the issue or accept their initial offer.
- A lack of response doesn’t mean rejection. Silence could mean internal discussions are happening, legal counsel is reviewing your request, or HR is weighing their options.
- Persistence signals seriousness. A professional, polite follow-up reinforces that you expect a response and are not going away.
How to Follow Up Effectively
- Be professional and direct. A simple email or call, such as “I wanted to check on the status of my request and see if you had any updates,” keeps things neutral and non-confrontational.
- Time it right. If you set a deadline in your demand letter, wait until shortly after it passes before following up.
- Escalate if necessary. If repeated follow-ups go unanswered, you may need to adjust your approach or explore legal options, but always start with a professional and persistent inquiry.
A well-executed follow-up can restart stalled negotiations and increase the likelihood of securing a favorable severance package.
FREQUENTLY ASKED QUESTIONS ABOUT DEMAND LETTER COMPOSITION
What Should I Include in My Severance Pay Demand Letter?
Your demand letter should include key facts about your employment and termination, the legal basis for your severance request, and a reasonable settlement proposal. Keep it concise, factual, and professional. Avoid unnecessary details, emotional appeals, or speculative accusations.
How Long Should My Severance Pay Demand Letter Be?
Shorter is better. A demand letter should be clear and to the point, ideally no more than one to two pages. Employers are more likely to engage in negotiations when the letter is easy to read and does not overwhelm them with unnecessary information.
How Do I Determine a Reasonable Severance Pay Request?
Your demand should be based on factors such as your salary, length of employment, the strength of your claims, and potential damages (e.g., lost wages, benefits, emotional distress). Making an unreasonable demand can backfire, leading the employer to dismiss your request outright.
Should I Threaten a Lawsuit in My Severance Pay Demand Letter?
No. While you can reference potential legal claims, directly threatening a lawsuit can make employers defensive and less willing to negotiate. Instead, focus on presenting a strong case for why a severance package is a fair resolution for both parties.
How Do I Set the Right Tone in My Severance Pay Demand Letter?
Your letter should be professional, direct, and solution oriented. Avoid aggressive or accusatory language. Employers are more likely to respond positively if they see severance as a reasonable way to resolve the situation rather than as a confrontation.
What If My Employer Doesn’t Respond?
If you don’t receive a response by your stated deadline (typically 7-14 days), follow up with a polite reminder. Employers often delay responses, and a follow-up can prompt them to act. If they continue to ignore your request, you may need to explore legal options.
By following these guidelines, you can improve your chances of negotiating a fair severance agreement without unnecessary conflict.
Conclusion
Writing a severance pay demand letter requires a strategic approach. A well-crafted letter can increase the likelihood of a favorable severance package, while a poorly written one can damage your negotiating position. By keeping the letter concise, fact-based, professional, and solution-oriented, you improve your chances of reaching a fair agreement without unnecessary conflict.
Contact the Ruggles Law Firm at 916-758-8058 to Evaluate Your Potential Lawsuit
Matt Ruggles has a thorough understanding of California employment laws and decades of practical experience litigating employment law claims in California state and federal courts. Using all of his knowledge and experience, Matt and his team can quickly evaluate your potential claim and give you realistic advice on what you can expect if you sue your former employer.
Contact the Ruggles Law Firm at 916-758-8058 for a free, no obligation consultation.
Blog posts are not legal advice and are for information purposes only. Contact the Ruggles Law Firm for consideration of your individual circumstances.
