Two hotels sold by Loews Corp. to New Hampshire and Resorts/the buyer paid Severance to some people

In Dec. 1999 I used to work for a hotel that was sold, my coworkers received SEVERANCE. I did not, why ?

Some of them stayed with the company because they needed them like me .

Help help help.

1 answer  |  asked Jul 20, 2001 7:28 PM [EST]  |  applies to New York

Answers (1)

David M. Lira
Entitlement to Severance Payments

Generally speaking, in a termination situation, you are not entitled to severance, but, in some, but not all cases involving fairly sizeable lay-offs, often connected with a mergers or acquisition of some kind, severence payments may fall under the Employee Retirement Income Security Act ("ERISA"). This is what you need to check out.

ERISA is important because, if the severance payments fall under ERISA, then employers are prohibited from "discriminating" among similiarly situated employees. Here, discrimination would mean giving some employees in, say, a particular title severance payments, but not other employees in the same title.

First, be sure who was paying out the severance. In my experience, it is usually the selling company which does the lay-offs because the buying company wants to avoid liability exposure for terminating employees.
Second, if a fairly good number of employees were involved in the lay-off (I'd say roughly at least 20 to 50, although their is nothing in the law that says the number of employees has to be this large), then ask the company doing the lay-offs whether there was a "summary plan description" (or "SPD") governing who gets and does not get severance benefits. If there was an SPD, ask for a copy of it. The SPD will define your rights, if any. If there is an SPD, it would be far easier to tell you what your rights are.

It is possible to have a situation where there is no SPD but the severance payments would be considered to be covered by ERISA regulations. But, I would usually say that, if the lay-offs involved only a few very select employees, it may not involve ERISA at law.

posted by David M. Lira  |  Jul 23, 2001 09:43 AM [EST]

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