Severance packages

| Friday, January 22nd, 2010 | No Comments »

Clash of the Talk Show Hosts

Talk show host, Conan O’Brien, has reached a $45 million (U.S.) deal with NBC.

After only 7 months on the Tonight show, as a result of poor ratings 46- year old O’Brien will be off the air. With fellow talk show host, Jay Leno, returning to his former late night slot, O’Brien will personally receive $33 million with the balance to be paid out as severance to his staff and crew.

O’Brien didn’t take the news lightly.  Rather, he publicly declared his disappointment that NBC had given him less than a year to establish himself as host.

He even went so far as to state that “[y]ou can do anything you want in life. Unless Jay Leno wants to do it, too!”.

As O’Brien’s employer, NBC may have provided an excessive severance package.  Deals of this magnitude are extremely rare.

In Canada, severance is usually determined by the “Bardal” test, which asks how long it ought to reasonably take an employee to secure another, comparable position.  Relevant factors include the employee’s age, tenure, position and the availability of another similar paying job when considering personal circumstances.

There can be other complicating factors, such as an employment contract that includes either a golden parachute or alternative a punitive termination clause.  As well, and likely what occurred in the O’Brien case, negative public scrutiny can often influence how fast – or how much, an employer pays to get rid of an employee.

Alyssa Minsky is an employment lawyer with Whitten & Lublin LLP, an employment law firm providing workplace legal representation for employers and employees.

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