Position eliminated in merger - Am I entitled to severance?

I am a female executive in a company that is about to make a major acquisition. I was notified on Friday that as part of this acquisition, my position is being eliminated and my product line dropped. I have been offered another position in the company which is a lower grade and has lower total compensation (although I've been assured that the base salary would not change).

The company has made a blanket statement that anyone whose job is impacted by this acquistion will be offered severance according to the company's severance policy. The policy was previously documented and posted on the company website but has since been removed.

The hiring manager for the new position is requiring a response on Monday. My current manager (a C-Level Exec) is avoiding telling me if I am entitled to severance if I don't accept the offer.

Am I legally entitled to collect severance if I decline the position that has been offered to me?

Also, my employment agreement states that termination (with or without cause) will nullify my non-compete agreement. Based on that, can my employer require me to sign an overriding non-compete agreement in order to collect severance? Is this something that is normally negotiated?

1 answer  |  asked Oct 18, 2008 9:52 PM [EST]  |  applies to Pennsylvania

Answers (1)

Harold Goldner
It's possible, but we have to see the agreement

I think it's wonderful that this website is available to help folks like you answer questions you may have about your employment situation.

But whenever a question involves a particular contract, it is critical that a lawyer actually see the contract to be able to give you a definitive answer.

The best I can say is 'it depends.' Typically, in Pennsylvania, if an employer FIRES an employee, the non-compete is no longer enforceable, but there are exceptions. When an employee behaves unethically or criminally, they can expect to get fired, and in those instances, they may well be held to their covenants not to compete.

The bottom line is, if it is important enough to you to know definitively what you can and cannot do with your non-compete, you need to get to a lawyer and let him or her look at your entire employment situation, any other contracts or documents, and spend 'quality time' with you to fully assess your situation.


posted by Harold Goldner  |  Oct 21, 2008 4:56 PM [EST]

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