Can a company fire several employees just prior to announcing layoffs and later offer severance packages to the remaining employees?

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Can a company fire several employees just prior to announcing layoffs and later offer severance packages to the remaining employees?

My company is downsizing and giving severance packages to my department based on years of service. Over the course of 3-4 weeks prior to the announcement, they fired 4 people with 10-14 years of experience on the job which would have been a costly severance package for the company. Is there legal action we can take to receive severance?

Asked on April 17, 2011 under Employment Labor Law, Indiana

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

While it is probably worthwhile consulting with an employement attorney, there is a good chance that that you will not have recourse. The problem is two-fold:

1) Companies are not obligated to give severance at all--period. So the company could choose to not provide any severance, or to provide it to only certain employees.

2) Even when a layoff (restructuring, "right sizing", etc.) is being conducted, a company may terminate employees for other reasons (e.g. performance related).

If you can show that you and the other 3 employees fall into a protected category (age over 40 being the main one I'd imagine for this situation; also possibly, race, religion, disability, sex) and that it appears you were treated differently owing to that reason, you may be able to establish an employment discrimination claim.


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