Layoffs and Severance Pay

[JohnErick]

What is the name of your state? CALIFORNIA

On July 8, 2004, I was laid off with a group of 50 from my job in Santa Ana, California.

While nothing wrong has transpired at all, I do have a question. Since my employer was not very trusted by the employees, I do have a possible concern. I would like to be prepared. The company I worked for tended to change their policies and rules on a monthly basis without much notice...

We were terminated as part of a downsizing. Of course, aside from paying us all off for current hours worked, they offered the usual compensation of severance pay in exchange for a signature on a non-disclosure agreement.

They said that if we signed the agreement that day, our severance pay would be sent to us within 7 days. If they do not send this severance pay within 7 days or deposit it, are the violating any laws, labor or otherwise since they verbally told us we'd get severance for our signatures? I'm concerned they may not be timely or simply not pay up. Are they bound by their verbal word? They did announce this in an assembly of 50 employees.

Also, one other question. I was told by someone that in the state of California, companies that lay off employees are not able to hire any new employees to replace them for up to 90 days, without first offering the jobs to the employees that were laid off first. (?)

Thanks for the help!

 

[divgradcurl]

We were terminated as part of a downsizing. Of course, aside from paying us all off for current hours worked, they offered the usual compensation of severance pay in exchange for a signature on a non-disclosure agreement.

They said that if we signed the agreement that day, our severance pay would be sent to us within 7 days. If they do not send this severance pay within 7 days or deposit it, are the violating any laws, labor or otherwise since they verbally told us we'd get severance for our signatures? I'm concerned they may not be timely or simply not pay up. Are they bound by their verbal word? They did announce this in an assembly of 50 employees.

First off, just so you know, there is NO requirement in CA for an employer to offer severance pay. An exception would be if you had an employment contract specifying severance pay, or were part of a union, but the general rule is that a company has no legal obligation to provide severance pay to laid-off employees.

However, in your case, you MAY have an enforceable contract, as you have given something up -- whatever it was you signed waived some rights you would otherwise have -- in reliance on the promise that they would provide severance pay. Normally, the trouble with an oral contract is that it can be tough to prove in court -- but if you have 50 witnesses, at least some of whom would be willing to testify if it went to court, then you stand a good chance of proving the existance of the oral contract.

Just for completeness -- if the company had promised severance pay but NOT required you to sign anything that limited your rights to sue the company or talk about the company in the future, then that would be a gratuitous promise, or basically a gift, and NOT a contract, and would therefore be unenforceable, witnesses or not. But since you signed the NDA, that should be sufficient to form a contract.

Also, one other question. I was told by someone that in the state of California, companies that lay off employees are not able to hire any new employees to replace them for up to 90 days, without first offering the jobs to the employees that were laid off first.

That is not true. Under California law, there is no requirement for a company to have any waiting time, nor is there a requirement to offer any jobs to the people who were laid off first. A company could hire replacements BEFORE laying others off, if they wanted to.

If as particular employer has an agreement with a union, then there may be a rehiring requirement -- but that would depend on the existance of a collective bargaining agreement, not California labor law.