Severance Pay When Resigning: How to Walk Out The Door With More Than Your Coffee Mug

April 29th, 2022


severance pay when resigning halunenlaw.comYou’ve found a better opportunity. You want to take your career in a different direction. You just can’t take it anymore and need to get out ASAP.

These are a few of the many reasons people resign from their jobs, even if they don’t have a new one lined up. If you’re considering leaving your employer, you’ve likely put a lot of thought into your decision. But while you may have a good handle on why you’re resigning, you may not have given equal consideration to how you’ll do so.

That can be a costly mistake. Resigning abruptly, without an exit strategy and without speaking with an employment lawyer, could deprive you of the chance to leave with significant severance benefits. Storming out or giving notice may feel great in the short term, but the long-term implications to your finances, reputation and future opportunities may not be so exhilarating.

That’s why having a thoughtful, strategic plan for your departure is a critical prerequisite to any planned resignation.

Before breaking the news to your employer that you’re moving on, consider taking the following steps:

Think About What You Want

When you leave, what do you want to take with you other than a box of personal items from your desk? This is a particularly important question if you don’t have a job waiting for you upon your departure.

Answer these questions:

    • Do you want severance pay or the continuation of benefits and, if so, how much, for how long and in what form (e.g., a lump sum or payments over time)?
    • What are you willing to give your employer in return for a severance package? Are you prepared to forfeit any claims you may have against your employer or agree to restrictions on future employment opportunities?
    • How much does it matter to you to leave on good terms? Do you care about burning bridges or is it important that there be no hard feelings
    • Would you like to agree with your employer regarding the messaging – to colleagues, customers, and prospective employers – surrounding your departure?

Understand What You May Be Entitled To

Unless your employment contract, collective bargaining agreement, or company policy says otherwise, or your employer wrongfully terminated you for legally prohibited reasons, your employer owes you nothing when you resign. Beyond legally required items such as COBRA health insurance coverage, earned sick days, or vacation time, the organization doesn’t have to pay you weeks or months of severance pay, unearned benefits, or any other consideration.

Accordingly, if you have an employment contract, look at the terms carefully. It may provide for severance upon your departure and include conditions for receiving it, such as a specified notice period or only if you leave for certain reasons. If you received an employee handbook, review any provisions regarding the employee exit process and benefits available after separation.

If no documents or official policies provide for severance, that doesn’t mean your employer hasn’t agreed to severance packages with other employees or won’t offer you one. Even if you’re resigning, you may have more leverage to negotiate a severance agreement than you realize.

Don’t Do Anything Without Consulting An Experienced Attorney

Leaving a job is as important a career move as starting one. For C-suite executives and other high-level employees, in particular, the start and end of an employment relationship are unique opportunities to negotiate the best possible terms and maximize your compensation and benefits.

But doing so requires a full understanding of your rights and options as well as the implications of how, why, and when you resign. If you announce your departure without first consulting a lawyer, you risk forfeiting your chance to negotiate a robust severance package. Your attorney can help you develop and implement a resignation strategy that puts you in the best possible position as you move on to better things.

If you’re considering resigning and would like help negotiating the terms of your departure, please contact Halunen Law or call us at (612) 605-4098 for a free consultation.


In his more than 20 years of legal practice, Clayton Halunen, founder and managing partner of Halunen Law, has successfully tried to verdict employee discrimination, harassment, and whistleblower cases and has effectively negotiated c-suite executive severance packages against some of the nation’s largest corporations.

Image Credit: Indypendenz / Shutterstock

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