What should the company do if an employee refuses to sign a separation agreement and asks for more money?

It really depends on the facts and circumstances of the termination. If the Company is genuinely interested in getting the release signed for fear of some existing liability, then negotiate. I find a useful technique is to ask the employee to tell me what they are basing their request for additional separation pay on? Often, they will tell you "length of service" or "loyalty and hard work" or some such other factor. But, sometimes, they will actually tell you what they perceive to be their legal entitlement, which can inform your decision regarding how much to negotiate. In almost all circumstances where the employee just wants more, I find that if you toss them another week or two, they can save face and feel like they are savvy negotiators. If they are sticking hard on an unreasonable number and you don't feel there is any real liability out there, make the one small move and then tell them IN WRITING that they have until [deadline] to sign and return it. If not received back by that time, the offer of separation pay will be withdrawn and they will get no separation pay. Then wait out the deadline. Keep in mind that the deadline may have to be at least 21 calendar days (and maybe as much as 45 calendar days) for workers 40 years of age and older pursuant to the Older Worker's Benefit Protection Act.

Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.

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