Legal Question in Workers Comp in Massachusetts
Employment Law
Robert Shaky is president of Shaky Corp. Shaky is in the business of providing large groups of people with limousine service to airports. Shaky�s business volume has been down since the events of September 11th. Shaky is not a big business. It consists of some buses, 6 drivers, and a support staff. Most employees have been with the company since its birth 10 years ago. Mr. Shaky is very loyal to his staff and treats them well. It is no secret to the staff that the company is not doing very well. Mr. Shaky had introduced a profit-sharing plan that was robust in the late 90�s. It has not returned any money to the employees for two years now. Mr. Shaky has repeatedly told his employees that if the company were ever to shut down, he would give everyone two months notice.
Last week Mr. Shaky met with his accountants who told him the company had run out of money and that the bank would not extend its line of credit. The company has no money to pay further salaries. Mr. Shaky has been told that if he does not pay his employees he could face serious penalties. On the other hand he is concerned that he may not be able to give his employees the two months notice he has always promised.
Mr. Shaky comes to you for advic
1 Answer from Attorneys
Re: Employment Law
Was his promise for 2 months severence written? Given to induce hiring any of the employees? Or promised to prevent one/more from leaving? Barring some enforceable legal promise (and this is not my area, but its an educated guess), given in exchange for something specific I don't think he has to pay the severence, especially if he can't. If there is no money, there is no money. In which case, he could be "ordered" to pay if enforceable, but with what? Company's going under.
He was not obligated to provide the severence if it was gratuitous (given in appreciation of ## years' of loyal service probably is still gratuitous).
Otherwise, looks like a super nice guy who always did the right thing by his employees - rare these days, and who genuinely cares about them, but just doesn't have the funds.
As a courtesy, next time don't identify him by name in a public way unless absolutely necessary (which it wasn't to ask your question) - only risks causing him embarassment or trouble.
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