Do We Have The Possibility Of A Case In Which To Negotiate/Sue For Severance Pay?


In advance, we'd like to thank the attorneys who take the time to read and answer this query.

Our company has recently filed for Chapter 11 bankruptcy. Our location was one of many announced as to be closed in the reorganization. Whereas the full-time employees ("in good standing") of other locations that had been shuttered previous to the BK receive/d severance pay, we have been notified that we are not eligible because we are being closed DUE to the BK.

However, we have exceptional reason to believe that our location was selected WELL BEFORE the BK filing to be closed, and that the announcement was delayed in order to fold it into the BK, and thus, to specifically deny us severance pay.

While we do not currently have any "paper" parts of the trail, we know where to go/who to go to, to get them (with the assistance of a good attorney, of course).

While we genuinely feel for our many cohorts who are losing their positions, and are not receiving severance pay, we feel that our situation may be singular, and also provable. In closing, precisely WHAT questions should we be asking and answering, and what evidence do we need to have in order to move on to a consultation with an attorney?

Again, thank you for your time and attention. We look forward to reading your replies.

2 answers  |  asked Mar 9, 2011 10:10 PM [EST]  |  applies to Pennsylvania

Answers (2)

Christopher Ezold
Before I respond to your inquiry, I must state that we have not spoken, I have not reviewed the relevant documents and facts, and I do not represent you. Therefore, my discussion below is not a legal opinion, but is informational only. Finally, my discussion applies only to issues to which Pennsylvania or Federal law apply, unless otherwise specified.

That being said, there is no right to severance pay in Pennsylvania. Scott Leah gave you good advice; other than if you were treated differently due to your race, gender, disability, age over 40, etc., of if the employer was covered by the WARN act and failed to give you 60 days notice, your only right to severance would be based on a contract (whether individual or union). If you have no contract, and the above issues don't apply, then the failure to pay severance to you is not illegal. It may be wrong, unfair, immoral or bad management, but that does not make it illegal.

If you would like to discuss this matter further, please feel free to contact me at the below address(es) or number.

/Christopher E. Ezold/
The Ezold Law Firm, P.C.
One Belmont Avenue,
Suite 501
Bala Cynwyd, PA 19004
(610) 660-5585

posted by Christopher Ezold  |  Mar 10, 2011 08:28 AM [EST]
Scott Leah
You do not say on what you base your belief that you are entitled to severance pay in the first place.

Pennsylvania law does not require an employer to pay severance pay to an employee who is laid off or terminated. Therefore, to have a right to severance pay, there must be a contractual right to the same. Those are often found in employment contracts or collective bargaining agreements. There may also be an enforceable right to severance pay if the same is provided for in an employee handbook or other employment policy.

If you have such a contractual right to severance pay upon termination, then you may be able to pursue that claim through the bankrputcy court. The bankrputcy of the company may complicate receiving the money, but does not necessarily mean you will not receive it. You may need to retain an attorney to represent your interests in the bankruptcy.

However, if you don't have a contractual right to severance pay, the bankrputcy is irrelevant. Without a contractual right to severance pay, you have no claim regardless of the bankruptcy.

It also does not matter that some employees received severance pay. If there is no contractual right to severance pay, the fact that the employer chose to give severance to some employees does not create a right to severance in other employees. Just as an employer can give a raise to some employees and not to others. So long as the employer does not discriminate against someoone on the basis of age, gender, national origin, etc., it can treat employees differently.

Finally, there is a possibility that the closing of your location may fall under the WARN Act, which requires employers to give 60 days advance notice of a plant closing or mass layoff in certain circumstances.

posted by Scott Leah  |  Mar 10, 2011 06:20 AM [EST]

Answer This Question

Sign In to Answer this Question

Related Questions with Answers

Have an Employment Law question?