Skimpy severance and the law
March 16, 2010Jon Brooks Comments OffEvil HR Lady is a blog written by a human resources professional who answers questions about the workplace sent in by readers. Here’s one from someone asking what legal recourse a family member who worked for the same firm for 35 years and was laid off with just four weeks severance might have.
An inlaw of mine is almost 65 years old, and has worked as a project manager at an engineering firm for 35 years. Last month he was laid off… with four weeks of severance. Because he thinks a) since 4 weeks is what’s in the company bylaws and b) that (based on no actual input from the company that I can see) he might get contract work for them one day, he doesn’t want to talk to a lawyer. I say the worst case scenario is he doesn’t get four weeks of severance, and best case can be a whole lot better.
Did I mention that he just came back from a 7 month leave in October to recover from surgery? Evil HR Lady, he has no college degree, did not become an engineer, has health issues, and lives in the economic cesspool that is greater Detroit. Am I being overly pessimistic about his prospects, or just pragmatic? In your opinion do we need to gently bring him around to the idea that he might as well start a legal negotiation, because he’s got a very tiny realistic shot at a professional future, and needs something to live off of? I suspect part of the reason he’s so reluctant to do anything is because it would mean acknowledging how little he was valued by that company, but the situation is what it is, and I say no sense pretending he was treated well, or will be in the future with fantasy contract work. And he says it was a layoff, but he was the only one let go at that time. Others have been let go previously.
The Evil HR Lady responds
I’m a big fan of severance. It keeps things civil and your terminated employees from initiating lawsuits. Note that I said initiating lawsuits, not from winning lawsuits, because, quite frankly termination lawsuits are hard for a former employee to win.
You see, you can terminate anyone at any time for any legal reason. (Assuming no contracts and at will employment here.) What you can’t do is terminate someone for illegal reasons. In your inlaw’s case you may say, “Look he was terminated because he’s almost 65.” Yes, that is illegal. You may not terminate someone because he is 64.5 years old. But, you certainly can terminate someone who is 64.5 years old, provided that his age is not the reason.
But, your question is should he file a lawsuit, right? Well, I’ll be honest with you–there is a probability greater than zero that you could win and still end up with less money. Why? Because the lawyer has to be paid. If the company bylaws stipulate 4 weeks of severance and they offered 4 weeks of severance and (and this is key) they offered 4 weeks of severance to other people they have terminated, then in order to win anything, he’s going to have to prove illegal discrimination.
Now, I would tell a company that they need to be extra careful because the burden generally falls on them to prove that they didn’t illegally terminate someone. But, that advice flips when you are talking about filing the lawsuit. You know who wins in a lawsuit? Lawyers. Yep. Everyone else is dragged through years (literally) of tedious, painful, litigation.
You don’t want to go to court. There is a real possibility that he could get more money if he simply threatens (or, better yet, has a lawyer threaten–some of them will write a letter for you for a few hundred dollars). But, there is also a possibility that no future consulting work will be the consequence of that lawsuit.
So, here is what I would do. 1. Ask for a copy of the Summary Plan Description. If they’ve let multiple people go, there should be one. (He should have a copy already.) It will state how severance is calculated. If his is calculated as per the plan, then that is that. 2. Call up an employment lawyer and ask for a short consultation (confirm the fee beforehand). Don’t call up one of those “were you hurt in an accident? Let’s sue!” lawyers because they won’t know what to do. Ask the lawyer’s advice on the potential age discrimination claim. 3. If the lawyer thinks there is a valid claim, have her write a letter asking for a reasonable increase in severance. 4. Then let it go. Take the 4 weeks (or whatever additional severance is offered) and get on with life.
Employment lawsuits are not the kind where you get million dollar payouts. The psychological toll of such a thing is not worth the money.
