Release claim for severance, not previously required, is now required.

My husband has been employed by Honeywell (formerly Allied-Signal)for 17 years and is anticipating being laid off. He is eligible for a severance package; however, he will be required to sign a release claim. Throughout all prior lay-offs no release claims were required. However, a lawsuit was settled this spring as a result of a prior lay-off. Are they allowed to just change the rules at this point? I realize this question is similar to 1 or 2 on the FAQ's; however, it is different in that the release has not been required in the past. PLEASE respond. Thank you.

1 answer  |  asked Nov 13, 2001 4:35 PM [EST]  |  applies to Arizona

Answers (1)

Francis Fanning
Release required

The answer requires a bit of convoluted legal reasoning, but let me see if I can state it as simply as possible. First, if your husband is an "at will" employee, this means he can be terminated at any time for any reason, and therefore anything that the company may have done in the past has no significance. However, an Arizona case decided last year held that some employees may have certain rights (in that case it was layoff by seniority) if the rights were promised in a company policy that can still be enforced as contractually binding. To explain what I mean by that would take a ten page lesson in employment law history since 1983.
Since there is no law that requires the payment of severance pay, the only way your husband would be entitled to it would be by company policy. Unless the company had a policy that could not be modified by the company unilaterally, the company is free to change the policy. Quite frankly, I can't imagine a company paying severance pay without requiring the employee to sign a release. Of course, your husband has no obligation to sign the release. If he thinks he has some kind of claim that he doesn't want to release, he should consult with an attorney before signing. Most people in layoff situations have no legal recourse or they have tenuous claims that are extremely difficult to prove.
To comply with the Older Workers Benefit Protection Act, employers must include language in the release that gives you time (21 days) to consult a lawyer as well as the right to change your mind and rescind the agreement for 7 days after signing it. It is well worth the cost of a consultation with an employment lawyer to have your questions answered and your husband's particular situation evaluated.

posted by Francis Fanning  |  Nov 16, 2001 5:33 PM [EST]

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