Under what conditions is an employee due severance pay?

There was some activity going on at my job so the company got some security people to come in and interview a handfull of people. So after that they interview us and they escorted us straight out the door and we were told we will be on administrative leave with pay until the investigation was over and that was about 2 months. Then we all get a letter in the mail saying that we’re terminated. They claim that they decided to outsource the job we were doing. I’m trying to see if they don’t have to pay us severance because I no they’re saying they pay us administration pay and trying to use that as our severance pay.

Asked on August 1, 2010 under Employment Labor Law, Nevada


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

As a general rule, there is NO entitlement to severance pay. The law does not require it, and, in fact, since employment is employment at will, employers are free to terminate people at any time, for any reason, without notice or severance. That said, there are some possibly grounds for compensation for you (and possibly your collegues) to explore with any attorney:

1) If any of you had employment agreements, the terms of those agreements must be honored.

2) Even without an explicit or express agreement, IF there was a very strong employee handbook, setting out the procedure for  termination in no uncertain tersm without qualification or caveat, they may create and enforceable implicit contract.

3) If your company's policy has been to pay out vacation days on termination, they should have to follow their own policy and pay you at least that.

4) If you or your colleagues were fired for illegal discriminatory reasons--e.g. race, religion, sex, age over 40, disability--that my give rise to a claim.

5) Depending on circumstances, if you've been publically accused of wrongful or improper activity which you never did, there may be a defamation claim.

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