Can the company lay you off and change their policy last minute to prevent paying out a severance to employees?

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Can the company lay you off and change their policy last minute to prevent paying out a severance to employees?

I was just recently laid off work. Upon my lay off I inquired of what my severance pay would be and if there was formal documentation of our lay off. I never got any information and no one including HR talked with me about my lay off. After 2 weeks of being laid off, I did not get a severance pay and was told that the company did not have one. However, I was emailed a policy change regarding severance pay by HR and it looks to have just been created recently.

Asked on October 14, 2012 under Employment Labor Law, Texas

Answers:

Michael A. Jacobson / Michael A. Jacobson, Law Office of

Answered 9 years ago | Contributor

A severance pay plan is subject to ERISA, the federal pension guaranty program.  ERISA requires that such a "plan" be made in writing, and be published in a Plan Summary, and be accessible to all employees for inspection and review.  The federal cases interpreting ERISA in the 9th Circuit which includes Washingotn State require compliance with the notice and publication requirements.  Unfortunately, the Circuit courts which interpret ERISA in Texas are not a subject I have studied.

The issue in your case is whether the Amendment you were emailed is invalid because the Plan in existence before the most recent version specifies somebody higher in the chain of command as being in charge or discusses how amendments to the Plan are to be made or sets out other procedures that are not being followed.  Its a highly technical issue of contract interpretation which ought to engage you in discussing things person to person with a trained employment lawyer.   

Best.

Mike Jacobson

Answered 9 years ago | Contributor

A severance pay plan is subject to ERISA, the federal pension guaranty program.  ERISA requires that such a "plan" be made in writing, and be published in a Plan Summary, and be accessible to all employees for inspection and review.  The federal cases interpreting ERISA in the 9th Circuit which includes Washingotn State require compliance with the notice and publication requirements.  Unfortunately, the Circuit courts which interpret ERISA in Texas are not a subject I have studied.

The issue in your case is whether the Amendment you were emailed is invalid because the Plan in existence before the most recent version specifies somebody higher in the chain of command as being in charge or discusses how amendments to the Plan are to be made or sets out other procedures that are not being followed.  Its a highly technical issue of contract interpretation which ought to engage you in discussing things person to person with a trained employment lawyer.   

Best.

Mike Jacobson


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