Legal Question in Employment Law in California

Unpaid Severance

I work for a major entertainment company. In October 1999, I was laid off with 9 other employees. We were all given 8 weeks notice and told we would be given 1 weeks severance pay for every year we had been employed. We were also encouraged to try to find new jobs WITHIN the company AND told we would recieve our severance package EVEN IF WE STAYED WITH THE COMPANY. We were told this in our "lay off conference" by a senior level representative of Human Resources verbally AND in writing via email. Three of us ended up finding jobs within the company. We have asked for our severance pay several times to no avail. We eventually received an email from HR stating that we had been promised the severance "in error"...that people that stay with the company do not get severance pay. We all made decisions based on this promise. We all could have left the company with our severance package and been rehired by the company a week later, but based on their promise that we would receive severance no matter what, we stayed. If we file a claim with the Labor Board will we win based on the oral and verbal promise the company made?

THANKS FOR YOUR INSIGHT!!


Asked on 5/28/00, 1:09 pm

2 Answers from Attorneys
Norman Gregory Fernandez, Esq. The Law Offices of Norman Gregory Fernandez & Associates

Re: Unpaid Severance

It sounds like breach of contract, or promissory estoppel to me, or even fraud!! Especially if you gave consideration by not going to another company in return for the promise. Please call my office for a free consultation if you are located in Southern California at 818-342-8020 x1.

Norman Gregory Fernandez, Esq.

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Answered on 7/07/00, 6:05 am
Frank Pray Employment Law Office of Frank Pray

Re: Unpaid Severance

See Asmus v. Pacific Bell (2000) 23 Cal. 4th 1 which holds that an employer's unilateral promise, when acted upon by an employee, may not be withdrawn without prior reasonable notice. In this case, the "severance" was really a "stay bonus", and intended by the employer to motivate qualified employees to stay with the company in different capacities. The employer induced and received the benefit. Now it must deliver the pay.

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Answered on 7/10/00, 5:40 pm


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