Legal Question in Employment Law in California

wrongful termination by company in chapter 11

I have been terminated from my position as sales director and told by my boss that there is no point is suing the company as the company is in chapter 11 and I wont get anything.

However they are asking me to sign an 18-month global non-compete and give up rights to any legal claims agreement in return for severance pay.

Having been on the receiving end of many wrongful termination claims I believe I have a strong case but want to know if it is worth pursuing a company in chapter 11


Asked on 4/02/03, 3:28 am

1 Answer from Attorneys
Michael Kirschbaum Law Offices of Michael R. Kirschbaum

Re: wrongful termination by company in chapter 11

Filing bankruptcy under Chapter 11 does not automatically protect employers from a wrongful termination suit, as the employer evidently knows by asking you to sign a release.

If you work in California, covenants not to compete are unenforceable and against public policy.

The problem is that, unless there is a severance policy the employer is obligated to follow, they do not have to pay you anything other than earned wages and vested benefits. So refusal to sign a release will probably not get you any severance.

If your case is as good as you think it is, you are probably in a position to negotiate a better severance agreement than the employer is letting on. You can either attempt to do this yourself, or hire an experienced labor law attorney to help you.

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Answered on 4/02/03, 10:45 pm


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