This blog was written by Matt Ruggles, a California employment attorney with over 30 years of experience representing employees in severance negotiations across industries like technology, healthcare, and finance. Matt has helped everyone from frontline workers to high-level executives improve their severance outcomes by using California’s employment laws to their advantage.
In this blog, Matt breaks down seven Mistakes that Ruin Severance Negotiations i.e. the costly, avoidable missteps employees often make when navigating California severance agreements without legal guidance.
Introduction
If you’ve been fired and think you can handle your own severance agreement negotiation, let me be blunt: you are almost certainly going to screw it up and end up either failing entirely (meaning, no increase), or spend a tremendous amount of time and energy to gain a nominal increase.
Severance negotiations are fraught with traps you don’t even know exist. I’ve heard from countless employees who torpedoed their own legal position before they ever asked for help. Not because they’re bad people or bad employees, but because they don’t know what they’re doing.
Here are seven ways employees consistently torpedo their own severance agreement negotiations when they try to handle the negotiations without a lawyer.
Negotiation Mistake #1: Making a Severance Demand Before Talking to a Lawyer
The most common mistake terminated employees make to ruin their severance negotiation is to make an initial demand for an increased severance payment before gathering their information or getting competent legal advice. Employers are prepared and trained to respond to initial requests by immediately rejecting the demand without any counter-offer; in so many words, the employer will tell the employee the initial severance offer is a “take it or leave it” situation. Employers do this because they know that you will not be able to effectively mount a valid legal claim, or anything else, without the help of a qualified attorney. As a result, on-the-spot negotiations almost always fail. So do demands that come very quickly after termination and are grossly inflated. In other words, your initial demand – if you do it yourself – will almost certainly fail.
That initial mistake puts you in a very weak position. Here’s why: the employer already made the difficult decision to terminate your employment and offer you some amount of severance. Strike One. After learning of your termination, you made a ridiculous, uninformed and poorly worded severance demand that went absolutely nowhere. Strike Two.
No one wants to be at bat with 2 strikes down because there is a very high risk of striking out. But when you act quickly or impulsively, or even worse – emotionally – you are giving the employer exactly what it’s hoping for: a struggling, worried and confused person that just lost his/her job, and has almost no idea what to do next. In more colorful terms, think of it like this: when the employer fires you they are stabbing you in the back; when they deny your initial severance demand, the employer is twisting the knife lodged in your back. Obviously, with a knife being twisted in your back (i.e. your future is in disarray because of your termination and the employer is dangling a low payment that they know you need), your negotiation leverage is completely compromised, and your odds of success are just about gone. You will wind up accepting the initial severance offer after considerable frustration, confusion and time. Bottom line: an initial severance demand without the assistance of an attorney almost never works.
Negotiation Mistake #2: Trying to Play Lawyer Without Legal Training
Trying to write your own demand letter “like a lawyer” never works for one basic reason: you have no idea what you are doing, and everyone that reads your letter will instantly know it. Here’s why:
You Are Not Qualified: Watching “Suits” doesn’t qualify you to practice law. Neither does Google. Legal research isn’t something you can do on your lunch break. It requires specialized (and very expensive) software, years of training, and the experience to know what works in court. Almost no one, regardless of the person’s level of education or expertise some other field, can write like a lawyer that any opposing attorney is unable to detect. In other words, when you “act like a lawyer” you look sort of ridiculous to all the real lawyers, and it doesn’t motivate anyone to pay you more severance.
You Don’t Really Know How to Present An Argument: You don’t know what’s persuasive. You don’t know what’s credible. And no, ChatGPT can’t do it for you either. Trying to play lawyer is like entering the Indy 500 with a blindfold on. It’s not bold – it’s reckless.
You Don’t Know the Law: Let’s be honest: beyond that fact that it prohibits discrimination, harassment and retaliation (if you know that), you have no idea what the California Fair Employment and Housing Act (FEHA) actually says, how it is applied, or what any of the terms in the statute actually mean – it’s very complicated.
You might justifiably believe you were wrongfully terminated, but that doesn’t mean you understand how to assert a valid claim under the FEHA that might actually work. If you don’t understand the FEHA, the burden of proof shifting framework for a FEHA-based claim, how to link relevant facts to a legal standard under the FEHA, and how to deflect any adverse facts, you’re not going to scare anyone!! Instead, you are going to look uninformed, unorganized, and sort of silly, honestly. Any lawyer can tell when a non-lawyer has written a letter to look like a lawyer – it’s 100% obvious, trust me. Bottom line: when you try to write a letter like a lawyer, you’re just giving them more rope to hang you with.
Want to learn how to effectively use leverage in a severance negotiation? Read my blog: How To Use Leverage in Severance Negotiation.
Negotiation Mistake #3: Making an Unrealistic Severance Demand
This is the most common mistake. You ask for some wildly inflated number, say10, 20, even 30 times what’s realistic, based on nothing but what sounds “fair” to you. But severance agreement negotiation isn’t about fairness. It’s about legal leverage, risk, and how damages are calculated. If you don’t understand wrongful termination damages (including the difference between economic and non-economic damages, and the limitations/restrictions on both), you have no idea where the negotiation range even is. You’re picking a number out of thin air and your former employer knows it. That’s not a threat. That’s noise. This kind of misstep is one of the more frequent employee severance negotiation mistakes and is never successful.
If you want to understand how severance pay is actually calculated, check out my blog: Severance Pay Demand: How to Calculate Effectively.
Negotiation Mistake #4: Writing Your Own Severance Demand Letter
Unless you’re a lawyer, your letter is going to read like it was written by a sixth grader. That’s how it looks when it lands in the hands of a real lawyer. You won’t know what to say, what not to say, or where the pressure points are. And worse, you’ll say too much of the wrong thing and not enough of the right thing. You don’t know how to construct the argument because you don’t understand the balancing act that goes into presenting a credible threat. These letters fail almost every time. And not 50% of the time, but virtually every single time. It’s one of the most damaging employee severance negotiation mistakes you can make.
Want to learn how a severance demand letter should actually be written? Read my blog: How Do I Write a Severance Pay Demand Letter?
Negotiation Mistake #5: Including Too Much Detail in Your Severance Demand Letter
Long, rambling, overly detailed letters don’t get read: they are too long, too boring, and normally completely unorganized. Most of the time, the company is going to read one or two pages, and conclude you are totally unrealistic and out of your mind, and decline to negotiate.
As noted above, a poorly written demand letter is particularly ineffective. Legal departments scan them and know instantly: this person is no threat because they obviously are not getting legal advice and obviously do not understand the law or procedure that applies to the alleged claim (if you can even manage to allege a valid claim, which most people cannot do). And that’s if the letter even makes it to the right person. But here’s the real kicker: if you ever file a lawsuit, that bloated letter you were so proud of will be a problem. At your deposition, the employer’s lawyer will use your own words against you. They’ll twist every sentence. So not only did you fail to get severance, but you’ve also now ruined your own lawsuit. This is one of the most damaging employee severance negotiation mistakes you can make.
Want to learn even more about how a severance demand letter should actually be written? Read my blog: Boost Your Executive Severance Pay: Demand Letter Tactics That Work
Negotiation Mistake #6: Insisting on Unvested Equity
Unvested equity claims almost never work. These agreements are governed by federal law and usually define the value of your vested shares as zero. And the agreements are airtight. Unless you’re holding a golden lottery ticket, and you’re not, this demand is going nowhere. I’ve never seen a terminated employee get paid out unvested equity through a severance agreement negotiation. Not once. Nevertheless, this remains one of the more persistent employee severance negotiation mistakes.
Negotiation Mistake #7: Arguing About the Past Instead of Framing the Future
You want to tell them how hard you worked, how many clients you brought in, and how much you deserve a payout. They don’t care. You’ve been fired. Your credibility is gone; if the company really cared at all about what you thought or said, do you think you would have been terminated? Of course not! The sad reality is that an involuntary termination is the employer’s legal notice that they don’t want to have anything to do with you, and that decision will never change. In other words, arguing about what your former employment was “worth to the employer” sounds like a good strategy, but is weak because the company will respond every time: that’s what we paid you to do! And if you start arguing about your past accomplishments and your past value, the employer is just going to pick it apart. “Actually, you didn’t bring in that client. Steve did.” That debate helps no one.
The right way to approach severance agreement negotiation is to focus on what you need to move forward in order to bridge the gap to your next job. But most people can’t thread that needle. They overdo it. And the company’s response is simple: “We don’t owe this person anything.” This is another classic example of employee severance negotiation mistakes that derail the whole process.
FREQUENTLY ASKED QUESTIONS ABOUT NEGOTIATING SEVERANCE WITHOUT A LAWYER
What are the biggest mistakes employees make when negotiating a severance agreement on their own?
Employees commonly make costly errors such as demanding severance too early, writing ineffective demand letters, asking for unrealistic amounts, or referencing unvested equity. These missteps often undermine their legal position and weaken leverage.
Why should I avoid writing my own severance demand letter?
A poorly written letter can damage your credibility, reveal legal misunderstandings, and be used against you later in litigation. Without legal training, it’s easy to include too much detail or miss key legal leverage points.
Is it worth hiring a lawyer to negotiate my severance agreement?
Yes. A lawyer can assess your legal claims, calculate a realistic severance range, and frame a credible threat based on California law. The cost of legal help is often far less than the value lost through negotiation mistakes.
Can trying to negotiate severance by myself hurt my chances in a future lawsuit?
Absolutely. Missteps like oversharing in writing or making unsupported legal claims can later be used against you in a deposition or court. Early legal mistakes often have long-term consequences.
Final Word: Don’t Try This on Your Own
Severance agreement negotiation is not a DIY project. If you try to handle it yourself, you will almost certainly screw it up one way or the other. You’re not going to get what you’re owed. And worse, you may destroy your ability to ever make a legal claim later. The cost of making these employee severance negotiation mistakes is almost always higher than the cost of getting legal help upfront.
Get help before you act. The earlier, the better.
For a deeper look at how to approach these discussions the right way, read our blog: Effective Severance Agreement Negotiation.
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.
