"Substantially Equal Employment" - coercion?

If an employer sells a product line and the severance policy states "substantially equal employment" means no severance payment, can they insist that the employees concerned sign a statement that the new owner is giving them substantially equal employment? We are losing our 401K and matching contributions, pension plan, retirement medical and we do not know the details of the new health benefits.

1 answer  |  asked Dec 17, 2003 1:16 PM [EST]  |  applies to New York

Answers (1)

David M. Lira
Being forces to give up severance

The general rule is that employees are not entitled to severance. However, if there is a written severance policy which is customarily followed by the employer, the severance policy, under the right set of factual conditions, could become an ERISA welfare plan. If it becomes an ERISA plan, then the employer would be stuck with the language "substantially equal employment."

Exactly what that language means is anybody's guess, but one place that needs to be checks concerning the meaning of that language is the policy itself.

posted by David M. Lira  |  Dec 17, 2003 4:19 PM [EST]

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