demanding that severance be returned

My wife was recently laid off. As part of the process she signed a severance aggreement/ contract and recieved her severance. A couple weeks later she was offered another position within the same company. She signed an offer letter and was rehired. The company is now demanding that she pay back the severance minus taxes. They have even threatened to fire her if she does not comply. No where in the severance aggreement or the offer letter, was this discussed. Can she refuse? If she does can they really fire her? Also they are not treating her as if she was never laid off and simply transfered to a new job, they are treating her as a new hire.

John Sneeringer

1 answer  |  asked Jan 29, 2002 4:37 PM [EST]  |  applies to New York

Answers (1)

David M. Lira
Laided Off and Rehired

With reference to whether she has to pay back severance, you are right that the key is the severance agreement. So, she has a right to keep that money.

But whether she has a right to keep the new job is a different question. Because we are in New York, she is an employee at will, so that the employer seems to be within her rights to fire her.

But there seems to be a third question: whether the employer can terminate her without incurring further liability on the severance agreement. Again, the wording of the severance agreement may be critical. Although I'm not entirely sure it would work, your wife just might have a claim for damages, but not the job, against the employer if the employer fires her for not paying back the severance money.

Your question raised another issue about her being treated as a new hire. That is not an easy question to answer, and may require review of further documentation. But let me say this: if the job involved no benefits as all, and there was no union, the employer probably could treat her as a new hire. If she is getting pension or health care benefits, to answer your question I would have to see the "summary plan description," and maybe the other plan documents to answer that question. But my guess is that for pension and health insurance she can't be treated as a new hire. Your wife would be entitled to copies of these plan documents on request. I am sure that for other benefits such as unemployment compensation, workers' compensation, FMLA (family leave) the statutes would control, and she probably would not be treated as a new hire. But that may depend on how long she was out of work before rehired.

posted by David M. Lira  |  Jan 30, 2002 09:29 AM [EST]

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