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Can people be forced to give up sev. package protection? California

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  • Can people be forced to give up sev. package protection? California

    I live in California. My company has offered severance package protection from layoffs for many years that are about 3 months of current salary for workers who have been at the company for a long time. It was to get a sufficient people to stay through multiple rounds of layoffs and the fear of the company closing.

    The severance package was posted HR policy where there were clear guidelines for what was offered based on # of years worked. The more years worked, the bigger the payout.

    Recently our company was bought by another company and the hiring company has now laid off some people and extended offers to others. But the job offer is contingent on signing papers within one week that essentially cause the employee at the new company to give up all rights, and give up the severance package for at-will employment where it's made totally clear there is absolutely no time frame of work guaranteed.

    We were told that to decline the position would be considered voluntary resignation and that there would be no severance package.

    I can understand that if one turns down a comparably salaried job offer that they'd be declined UI benefits because UI requires a candidate to accept all reasonable jobs. But how can the acquiring company force people to sign papers that rob them of the layoff package? Is that really legal? Don't they have to pay out if the person the company is extending the offer to doesn't want to have the risk of being let go the next day with no severance protection?

  • #2
    To the best of my knowledge, California law does not require employers to pay severance pay when an employee is laid off. As a result, employers are free to develop their own severance policies. There's also no law that requires an acquiring company to adopt the policies of a company it purchases.

    It sounds like, unfortunately, your former company has been acquired by another company that does not provide severance upon layoff, and you all are out of luck on this one.

    You can certainly take the company handbook to an attorney for review to see if it constitutes a contact that the acquiring company must follow, but the very vast majority of handbooks do not stand up as contracts.
    I am not able to respond to private messages. Thanks!


    • #3
      Someone else thought that it is rather more like a contract or a liability (like vacation) that the buying company has. Since the sev. payout was a stated policy on the website, very clear about years worked/guaranteed payout that it was like a contract...

      Doesn't a buying company buy the debts and obligations of the other company? If they're not offering comparable protection how can they just suddenly strip the would be employees of their protection if that's the reason many employees stayed with the purchased company through the rough times?

      Seems like the purchasing company has to either extend similar protection or let people opt to take the package and leave...

      It isn't a matter of whether California requires severance it is a matter of the fiscally tangible policy/stated agreement in place that the purchasing company is trying to duck. Just like you can't duck the debts of an estate you inherit or a company you buy, I'd think the new company could not legally duck the obligation to extend the protection either through pay out or similar guarantee for some reasonable amount of time to give people to look for other work.


      • #4
        That is one for a lawyer to determine. Without the original document, (and possible a trial) it is a guess.


        • #5
          An individual employee cannot afford the legal fees.
          How do class action suits work? How could that get going while preserving reasonably anonymity of those contesting?

          There are 5 business days to return the papers that relinquish all rights and right to make a legal case, and requires binding arbitration instead (which I assume favors the corporation).

          How would one proceed under such constraints to make an effort to protect their rights?


          • #6
            Class action lawsuits are a function of actually visiting a law firm specializing in such things and seeing if they are interested. Different law firms could give different answers. It is not possible for anyone on this website (or any other website) to predict how a law firm will react to documents that none of us have read.

            Hiring an attorney by the hour to work a case through the trial phase is expensive. However, hiring an attorney to review the documents is much less expensive. I am going to suggest that failing to even have an attorney look at the documents is maybe "penny wise but pound foolish".

            CA is one of the few states where CA-DLSE will actually take a look at labor law elements containing contract law elements. You might want to download their manual and read the related sections. I am not giving odds, just saying that in CA filing a wage claim for severance related matters might work. Or not.
            "Reality is that which, when you stop believing in it, doesn't go away".
            Philip K. **** (1928-1982)


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