Can my wife collect unemployment if she also receives a severance package?

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Can my wife collect unemployment if she also receives a severance package?

My wife just got fired and they offered her a severance package. In this it states that the sum of money set forth above is the entire amount of money that she shall ever be entitled to receive from the company in respect to her employment with it. Does this mean she can’t collect unemployment? She is almost 5 months pregnant and they let her go because they said she was talking bad about some people. Does this seem right?

Asked on April 4, 2011 under Employment Labor Law, New York

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Unemployment is separate from severance, and is not money from the company--it's paid by the state (thought admittedly from funds originally assessed against workers and companies). As such a severance agreement does not prevent a terminated employee from applying for or receiving unemployment; as long as she was not fired for cause, she is eligible. (One thing to be wary of: if instead of receiving lump sum severance, it is paid over time through payroll, it may be the case that she will not be considered to be unemployed so long as she is receiving compensation.)

The real issue is whether the employer will state that she was fired for cause. "Talking bad about some people" *could* be considered grounds for for-cause termination--violation of a company policy, doing something (defamation?) which could make the company liable, and/or a form of insubordination, depending on who the target was. If the company interprets your wife's termination as for cause, then they may be able to contest unemployment.

Unfortunately, "right" doesn't enter into it; if your wife does not have an employment contract, she is an at-will employee and may be fired at any time. However, if she believes she was fired because she is a woman or was pregant, she may have an employment discrimination case and should contact an employment attorney.


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