Legal Question in Employment Law in Massachusetts
Company A is a global unit and has numerous facilities throughout the world with its headquarters in the US (Cambridge, MA).
In June 2016 Company A decides it needs to close one of its manufacturing facilities, located in Cambridge, MA. Company A states that it will try and sell its lease of the facility and the equipment inside to another company or it will just close the facility by 31DEC16.
By August 2016 Company A gets a letter of intent to buy the lease and equipment from Company B. Company B would like to retain only some of the personnel that are currently working in the facility. Company A works with Company B as a �consultant� with regard to the personnel that will be hired.
The employees working in the facility to be sold will receive a retention bonus provided they remain (in good standing) with Company A until 31DEC16. The employees were also given three scenarios with regard to their future employment with Company A.
1- In the event that there is no sale
a. Facility closes on 31DEC16.
i. employees will receive retention bonus
ii. Possible severance package (comparable to previous layoff packages)
iii. File for unemployment
2- In the event of a sale to Company B and you are offered a position with Company B
a. employees will receive retention bonus
3- In the event of a sale to Company B and you are not offered a position with Company B
a. employees will receive retention bonus
b. Possible severance package (comparable to previous layoff packages)
c. File for unemployment
Employees do not currently have any official information about the name of Company B or what this Company will provide for compensation of pay and benefits for the employees that are offered positions.
Employees laid off in 2015 and SEP2016 have received severance packages but no retention bonus as they were not asked to stay on for any amount of time after notification of termination.
What are the rights of an employee should they be offered a job with Company B and want or need to refuse the position (Company B offers less than employee is currently receiving for compensation)?
Does employee have right to be treated the same as the employee who was not offered a job with Company B with regard to severance and unemployment benefits?
1 Answer from Attorneys
The short answer is that you still get a retention bonus and you can file for unemployment because Company A has to terminate you even if Company B offers you employment. Whether Company A will try to fight your claim is the only question which I doubt they will do. Whether you get a severance package or not is the sole issue and it is likely that you will get a severance package as if you do not accept a job offer form Company B, another employee will. It is likely Company A will give you a severance package unless you are formally retiring because they do not want to spend time with claims filed by disgruntled employees and if they do not you can file a complaint with the appropriate administrative agency or sue them in court.
The retention bonus is for staying until the end of the year and if you do that you should get your bonus. Company B is more likely to keep your pay the same, the benefits will likely change in some way as will the way production is managed.
The people who are least likely to be retained by Company B are administrative personnel and some supervisory personnel and if they are employing different systems then maybe a few people in manufacturing. I have assumed there is no union involved in this plant. If there is the union should be negotiating a plant shutdown agreement and providing all the answers to your questions.
There should be a formal letter issued to you at least 60 days before year end to explain the terms in more detail.
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