Severance Policy changed same day my position eliminated

I am employed by a national nonprofit organization which, via a Board decision, elected to eliminate its severance plan. The organization historically has had a written severance plan and made full severance payments for job elimination. In the same meeting that the board voted to eliminate the severance plan, it voted to eliminate my position as well as several others AND give us no severance. Do we have recourse?

1 answer  |  asked Mar 28, 2005 11:35 AM [EST]  |  applies to New York

Answers (1)

David M. Lira
Severance was Pulled

To start, employees generaly have no right to severance. However . . .

If a company has a regular practice of providing severance for eliminated positions, that practice might fall under the Employee Retirement Incomes Security Act. ERISA also covers benefits such as pensions and hospitalization.

Generally speaking, even under ERISA, you can lose benefits you have not yet earned. Thus, an employer can change the terms of health benefits, even eliminate them. It can change how employees earn pension from today onward, but cannot take away pension benefits from employees who have already retired.

Thus, an employer with a long practice of providing severance can decide to terminate that benefit, but timing can be everything. If the employer decided to end severence benefits and terminate a set of employees at the same time, the motivation of the employer becomes key. If the two decisions were made to simply frustrate the rights of certain employees, that might be a violation of ERISA.

However, the determination is highly fact specific. It would be a difficult case.

Consult an attorney to discuss the specifics of your case. I would be glad to help.

posted by David M. Lira  |  Mar 28, 2005 5:16 PM [EST]

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