Jacob, this is great – do you have any advice on how to approach/negotiate this esp in the case of contractors/remote “employees”. Does it even change anything?
And do you have any advice on specific language/how severance should be defined in a legal agreement?
Severance with contract employees is not common. I have seen a few deals where contract employees had such great relationships that they were provided nominal-primarily cash-going away presents in the range of 1-3 months. What’s more common is negotiating termination clauses such as “30/60/90 day contract cancellation notice” or adding a fee collection tail for work that has already been done and has been accumulating value. Fee tails can also discourage a contract cancellation if you’re about to launch or trigger key value but the client doesn’t want to pay for the performance of said launch. Fee tails can be predatory if not perfectly aligned to the outcomes you’re delivering so be mindful.
Regarding language, it varies - typically it’s “no-cause” termination — meaning you won’t get severance if you’re an asshole and harass your team or steal resources or in general act without integrity. Thats fair. It’s designed to cover things like a strategic shift in company direction, re-org, etc.
The most client favorable language I’ve seen omitted the “non-cause” keyword and it essentially said, any reason you may get terminated will result in a 12 month cash and COBRA continuation severance.
I told my client - that’s very generous, take note of that concession and investment in your leadership.
Wish more companies did that. Perhaps we’ll guide more of them to it!
Jacob, this is great – do you have any advice on how to approach/negotiate this esp in the case of contractors/remote “employees”. Does it even change anything?
And do you have any advice on specific language/how severance should be defined in a legal agreement?
Severance with contract employees is not common. I have seen a few deals where contract employees had such great relationships that they were provided nominal-primarily cash-going away presents in the range of 1-3 months. What’s more common is negotiating termination clauses such as “30/60/90 day contract cancellation notice” or adding a fee collection tail for work that has already been done and has been accumulating value. Fee tails can also discourage a contract cancellation if you’re about to launch or trigger key value but the client doesn’t want to pay for the performance of said launch. Fee tails can be predatory if not perfectly aligned to the outcomes you’re delivering so be mindful.
Regarding language, it varies - typically it’s “no-cause” termination — meaning you won’t get severance if you’re an asshole and harass your team or steal resources or in general act without integrity. Thats fair. It’s designed to cover things like a strategic shift in company direction, re-org, etc.
The most client favorable language I’ve seen omitted the “non-cause” keyword and it essentially said, any reason you may get terminated will result in a 12 month cash and COBRA continuation severance.
I told my client - that’s very generous, take note of that concession and investment in your leadership.
Wish more companies did that. Perhaps we’ll guide more of them to it!