What are an employee’s rights to severance payif their employer is being taken over by another company?

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What are an employee’s rights to severance payif their employer is being taken over by another company?

My husband received a layoff severance package as his dept is being closed at his current company. This was last week. Nowhere on the current paperwork are there any stipulations. This week he is being told that if he accepts a position with the new company which is taking over the closing dept he will not receive his severance. They will however still pay out his earned time off. Is this legal? Can he fight this?

Asked on March 7, 2011 under Employment Labor Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

Severance is voluntary--companies are NOT required by law to provide it. Therefore, they may set terms and conditions on it, including that severance will not be available if an employee accepts a job at a new company which has taken over a department from the old company. (Also, consider it this way: while the name of the employer on the pay check or stub may change, if your husband is being picked up by the new company, he's not really losing his job; this is functionally the same as if a new company bought the old one entirely so he has a "new" employer but is doing the same job.)

The important thing again is this--the company didn't have to offer severance  in the first place, so if they choose  to offer it, they can put restrictons on it.


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