Negotiating a letter of reference in a severance agreement

Q: I’ve just been fired by my employer. Is it possible to negotiate a letter of reference as part of my severance package?

A: Yes, it is a good idea to try to negotiate a positive letter of reference as part of your ‘wish list’ in your severance agreement before signing off. It may also be worthwhile to speak with an employment lawyer before you release, or sign away, your rights with regard to severance, etc., to make sure you are getting a good deal overall.

In fact, it is quite common for employers and workers to both want to negotiate terms with respect to references. A positive reference can improve the chances of a worker finding a good similar new job elsewhere, and this may be helpful to both sides. As a result, it may often be in the interests of everyone for there to be settlement terms with regard to references.

The wording of this kind of clause in a severance agreement may, for instance, look like the following:

“The Employer shall provide a positive letter of reference in a form agreed to by the parties, as well as confirmation that all verbal references will be answered in a manner that is consistent with the letter.”

This kind of clause provides certainty to everyone with regard to what may occur if, or when, a prospective employer reaches out to the former employer for a formal or informal reference.

If you have any questions about severance negotiations, please feel free to contact me at 905-572-5806 or email me at wjamieson@rossmcbride.com. 

This article was originally published in The Hamilton Spectator.