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Advice & Opinion

Microsoft offered about 60,000 workers a buyout. Check these 7 things before you sign.

A buyout is a contract that usually buys your right to sue. Here's what workers 40+ are owed, and what can cost you unemployment.

Microsoft offered about 60,000 workers a buyout. Check these 7 things before you sign.
Stock photo. Photo by Scott Graham on Unsplash

Microsoft just asked about 60,000 people whether they'd like to leave. On Oct. 26, chief people officer Amy Coleman announced a "time-limited, voluntary program" offering eligible employees "financial support and career planning resources" to walk out the door, according to Microsoft's own post. It covers workers at level 70 and below on participating teams in the U.S., Canada, India and the U.K. The company confirmed the roughly 60,000 figure to TechCrunch, which is about a quarter of its workforce, and said the terms will look like its standard severance. (We covered the offer here.)

A buyout email feels like a gift. It is also a contract, written by your employer's lawyers, for your employer's benefit. Before you click "accept," check these things.

You're probably selling your right to sue

Buyout money almost always comes with a release of claims: you agree not to sue the company over anything that happened before you signed. Discrimination, unpaid overtime, retaliation, the promotion you were passed over for. If you have a claim, that release is the thing you're selling, so price it that way. Severance.law's guide to red flags in a severance agreement walks through the terms that should make you pause.

One limit works in your favor. A release can't stop you from filing a charge with the EEOC, and the EEOC says any term that tries to is "invalid and unenforceable."

If you're 40 or older, the law gives you time

The Older Workers Benefit Protection Act, part of the federal age discrimination law at 29 U.S.C. 626(f), says a waiver of age claims counts only if it is knowing and voluntary. That has a specific meaning. You must be told in writing to consult a lawyer. You get at least 21 days to consider the deal, or 45 days when it's offered to a group, as a buyout is. And you get 7 days after signing to change your mind; the deal doesn't take effect until that window closes.

Group programs come with homework for the employer. It must tell you in writing who was eligible, the factors that decided eligibility, the time limits, and the job titles and ages of the people chosen and not chosen. The EEOC calls that group the "decisional unit," and it says age bands like "40-50" don't satisfy the rule. Read that list. If the offer lands mostly on gray hair, that tells you something.

Unemployment may not come to the rescue

Unemployment insurance pays people who lose work "through no fault of their own," and each state sets its own eligibility rules, per the Labor Department. A buyout you volunteer for while your job still exists can look a lot like quitting. Some states will deny benefits on those facts, others won't, and the details matter. Call your state's unemployment office before you sign, and budget as if the answer is no. Severance.law's FAQ covers how severance and unemployment interact.

Do the math on health care and stock

Losing your job is a COBRA qualifying event, but COBRA is not cheap: the Labor Department says you can be charged up to 102% of the plan's full cost. Ask whether the package covers any of your premiums, and for how long.

Then pull up your equity and bonus schedules. Unvested stock usually disappears when you leave. If a big chunk vests next month or your annual bonus pays out soon, your exit date may be worth more than the check. Ask for it in writing.

Gag clauses may not hold up

If you're not a supervisor, the National Labor Relations Board's 2023 McLaren Macomb decision says employers can't offer severance deals that broadly gag you from talking about your job. As of late October the Board had not overruled it, though its Republican majority has signaled it might. Don't count on the rule lasting, and don't sign away more silence than you have to.

Buyouts often come before layoffs

Companies use voluntary exits to see who leaves on their own before deciding whether to cut. Microsoft hasn't said what happens if too few people accept. If you say no, know the warning signs of a layoff and keep your records in order.

Yes, you can negotiate

Group offers are often pitched as take-it-or-leave-it, but leverage changes that. A recent complaint, a pending leave, an injury, or signs of age bias can all justify asking for more. Severance.law's Microsoft buyout guide explains how to weigh the offer against what you'd get in a layoff.

This is general information, not legal advice for your situation. If the number matters to you, have an employment lawyer read the agreement before the deadline does the deciding for you.

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