This "oral transcription" article is based on conversations with Bennett & Belfort, P.C from the Boston law firm, and Craig Levey, a labor law attorney and partner at that firm. The following content has been edited and refined.
When a company offers an buyout package to its employees – as Microsoft did to about 60,000 of its staff last week – the employees have to make a decision.
Generally speaking, if an employee intends to leave the company in the short term, such as preparing for retirement or planning to switch to another job, then a buyout package can be a good option. If employees feel that their jobs may not be secure in the future, they might choose to accept a buyout, allowing them to receive money and benefits without the risk of being laid off; in such cases, the company may not offer severance pay.
In many cases, when a company launches a buyout plan, it often also implies that there will be more layoffs in the future. (Editor's note: A Microsoft executive previously stated regarding Business Insider, "Never say never, but the company certainly does not wish to carry out large-scale layoffs." Microsoft also stated in a statement, "Future staffing needs will continue to be based on business requirements and priorities.")
On the other hand, if you are an employee who intends to stay with the company for a long time, with many more years of your career ahead, buying out may not necessarily be a good option. This is because what you receive is only a relatively small sum of money, and after that, you will still have to look for a new job, which is not easy in the current job market.
I am a labor lawyer who often assist employees in negotiating separation arrangements with their employers, including through buyout agreements. Here are a few things you should make sure to do if you are offered the opportunity to participate in a buyout plan.
Thoroughly understand this offer.
HR or the legal department will send you offer, which usually includes clauses stating that you waive your right to legal claims, that you may not be rehired, and there may also be clauses prohibiting derogatory remarks, etc. You need to make sure you fully understand these terms; if not, please have a labor lawyer help you interpret them.
Questions that can be asked include: How much money can I get? Is it a one-time payment or installment payments? When will it be disbursed? What benefits are there? When do I have to leave the company? How much paid leave can I still take upon leaving? Am I eligible for unemployment benefits after leaving the company?
Remember to check the unemployment benefits rules of your state; they vary slightly from state to state, and you need to confirm whether you are eligible to receive unemployment benefits.
2. Try to judge whether you might be laid off in the future.
Try to figure out whether your position will be secure in the future. What needs to be determined is: if you don't accept the buyout now, whether you will also be laid off soon.
It's usually not appropriate to directly ask HR or your supervisor, as they may either not know this information or not be willing to tell you. Some employees might decide to ask anyway, thinking "there's nothing to lose," but that depends on each person's tolerance and acceptance level.
Try to obtain as much information as possible from the facts you have at hand. Observe your surroundings, and you can also communicate with colleagues you trust to gain some internal insights.
Looking back at the documents issued by the company president or CEO, such as emails or letters, what is the current state of the company? Is the financial situation so tight that it is reasonable to assume there will be more layoffs in the future? Has the company already undergone multiple rounds of layoffs? Perhaps the company has implemented a policy of forced return to work, which has resulted in some people resigning?
Many times, employees can tell the situation from the atmosphere: whether there are more troubles ahead, or whether the company is actually doing well, and it has decided to offer a buyout only to a certain department due to reorganization, with no impact on the rest of the company.
3. Decide to accept, reject, or negotiate
If you don't have any chips (in this context, it likely refers to bargaining power), negotiations will be difficult. When Microsoft offers a buyout to 60,000 people, it might not be easy for an individual to strive for a higher compensation.
However, if you feel that you are a target of such treatment, you should conduct an analysis to see if the company has violated any laws; whether they are targeting you specifically; and whether you are being discriminated against due to protected characteristics such as age, gender, or race, or if the company is retaliating against you for having reported previous illegal activities.
You might want to consult a labor law attorney in your state, as in that case, you could have a chance of negotiating for a higher amount.
It is particularly important to pay close attention to the deadline for accepting or rejecting offer. If someone is considering accepting offer and claiming payment, they may also want to consult a tax advisor or certified public accountant regarding the tax implications of such payment, especially as we approach the end of the year in the coming months.
In the end, buying out offer is simply a contract; you can accept it or refuse it. You are not obligated to sign it. However, if you feel that you are being forced to accept the buyout or that you are being targeted, you should consult with a labor lawyer to understand your rights.
If you have any experience regarding receiving an offer to buy out offer and deciding whether to accept it that you would like to share, you can contact this journalist: janezhang @ businessinsider.com.
