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The Honolulu Advertiser
Posted on: Monday, February 6, 2006

If you're laid off, you still have your rights

By LULADEY B. TADESSE
The (Wilmington, Del.) News Journal

Michael Dungan, 49, of Newark, Del., was offered a severance deal when he lost the customer-service job he'd held for 22 years at Citibank. By accepting, he gave up his right to sue the company.

FRED COMEGYS | The (Wilmington, Del.) News Journal

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Whether it's an individual firing or mass downsizing, the layoff experience is unpleasant.

The process is usually formal and succinct. You don't have a whole lot of time for goodbyes, or to download personal files. If you are eligible for a severance package, you will be given documents to sign. You also may be asked for an exit interview. And then you're gone.

If you think the ax is coming anytime soon, you should be aware of a few things before turning in your badge. Be familiar with the process. Start removing your personal belongings, and know your legal rights.

Never sign anything without reading it carefully and knowing its implications on your finances, future job search and your right to sue your employer.

Each company manages layoffs differently. The Accident Group, Britain's largest personal-injury insurance company, once sent its workers cell-phone text messages notifying them they had lost their jobs. Other companies have a more formal way of communicating the bad news to employees.

"You have a mixed bag," said Frank Scanlan, spokesman for the Society for Human Resource Management in Alexandria, Va.

Scanlan said many companies have come to realize respecting workers and laying them off with dignity is important not just for those terminated, but also for the morale of remaining employees.

Still, a company is not obligated to act in any particular manner.

In an employment-at-will state, you can be fired or laid off by an employer for just about any reason, or no reason at all as long as the employer is not breaking any law or discriminating. The employer doesn't even have to give notice.

"Theoretically, they can say, 'You are fired. I just don't like you. I want my nephew to take your job,' " said Gary W. Aber, an employment lawyer in Wilmington.

But as an employee, you have a right to ask why you are being let go. This is important because, if you are being fired for violating a company policy such as stealing, repeated absenteeism or even insubordination you may not be eligible for unemployment benefits.

You may dispute the claim with the state labor department. But the key is to know what you are up against sooner rather than later. No one has an inherent right to a severance package.

"People think that when they are laid off, they are supposed to get severance," said Nancy Ezold, owner of employment law firm Nancy O'Mara Ezold PC in Bala Cynwyd, Pa. "There is no legal requirement (for severance pay)."

Michael Dungan, who lost his job as a customer-service representative at Citibank in Newark, Del., after 22 years, was offered one.

He received a severance package a week after the company announced that the call center in which he was working would be shut down, and all the workers laid off.

"We each had a little packet," said Dungan, 49. "They said we weren't going to get any severance checks until this document was signed. They gave us 30 days to get it back to the HR department."

According to the federal Older Workers Benefit Protection Act, an employer must give workers 40 or older at least 21 days to review their severance package. These workers are allowed to consult a lawyer to review the contract before signing it.

"I advise a client to say, 'I am shocked, I don't know what to say, I would like some time to review this package,' " said Robin F. Bond, founder of Philadelphia-based Transition Strategies LLC, which helps individuals negotiate severance deals and other employment-related contracts.

By accepting a severance deal, usually employees give up the right to sue the company. Workers who are 40 or older have seven days after signing a release agreement to change their minds and revoke acceptance.

"They are paying you money to buy their peace," Aber said. "You are giving up all of your rights to make any claim against them once you accept the money."

If you sign documents, make sure you keep copies of everything. If you have stock options, it may take five years for you to gain full ownership, so make sure you have documentation and other information about when and how much you are to receive.

Finally, you may be asked for an exit interview. There is no law requiring you to do it, but experts advise you to be courteous. It's a small world, and if you badmouth individuals or the company, word is likely to get around. Why burn bridges?