Severance Benefit Claims
Severance benefit claims in Chicago and the rest of the country arise in several contexts. Your employer may have a formal written severance plan, or income protection plan, applicable to all employees, or a select class of employees, outlining the number of weeks or months of separation compensation payable in the event of an involuntary termination. These plans may or may not also include other benefits, such as continued participation in the company's health, accident, disability and life insurance plans at a subsidized rate. Severance can also arise from an informal plan, whether reduced to writing in any form or not, that through a history of providing the benefits has become an ERISA employee benefit plan. In addition, executives, managers and other professionals may have individualized severance or separation agreements provided pursuant to an employment contract.
Compared to other type of compensation or benefits, severance is perhaps the murkiest area of all in determining whether particular benefits are covered by ERISA, and thus subject to ERISA's regulations on claims procedure, or not. Even in the absence of a formal written plan or a group of employees to whom the severance applies, severance may be covered by ERISA depending on the facts and circumstances of the case. In such an event, failing to follow the proper pre-complaint procedures could be fatal to your claim. You may also be entitled to severance benefits, part of which is covered by ERISA and another part of which is not. Pursuing a claim for severance benefits is akin to entering a maze in a corn field. Knowing which path exits the maze is critical to choosing an entrance. While any lawyer can walk with you into the maze, only a lawyer with an in depth knowledge of ERISA has a bird's eye view of the maze and can identify which path to enter.
Severance Forfeitures
Frequently, severance benefit plans or agreements provide a forfeiture provision, frequently dubbed a "bad boy" clause which may purport to relieve the employer of the responsibility to pay severance in the event of a termination for cause—as defined in the plan or agreement—or for some other specifically defined misconduct. Not surprisingly, with executive and managerial compensation higher than that of other employees, employers more often cite these forfeiture provisions to avoid paying benefits originally promised to bridge you to your next position. We assist clients in claiming severance benefits and appealing denials of such claims.
Which Path to Follow
When an involuntary separation occurs, the employee may be faced with a decision on whether to sign an offered severance agreement or not. We consult you on the process and try to determine whether or not there are other claims you should not waive by signing an agreement.
Compared to other type of compensation or benefits, severance is perhaps the murkiest area of all in determining whether particular benefits are covered by ERISA, and thus subject to ERISA's regulations on claims procedure, or not. Even in the absence of a formal written plan or a group of employees to whom the severance applies, severance may be covered by ERISA depending on the facts and circumstances of the case. In such an event, failing to follow the proper pre-complaint procedures could be fatal to your claim. You may also be entitled to severance benefits, part of which is covered by ERISA and another part of which is not. Pursuing a claim for severance benefits is akin to entering a maze in a corn field. Knowing which path exits the maze is critical to choosing an entrance. While any lawyer can walk with you into the maze, only a lawyer with an in depth knowledge of ERISA has a bird's eye view of the maze and can identify which path to enter.
Severance Forfeitures
Frequently, severance benefit plans or agreements provide a forfeiture provision, frequently dubbed a "bad boy" clause which may purport to relieve the employer of the responsibility to pay severance in the event of a termination for cause—as defined in the plan or agreement—or for some other specifically defined misconduct. Not surprisingly, with executive and managerial compensation higher than that of other employees, employers more often cite these forfeiture provisions to avoid paying benefits originally promised to bridge you to your next position. We assist clients in claiming severance benefits and appealing denials of such claims.
Which Path to Follow
When an involuntary separation occurs, the employee may be faced with a decision on whether to sign an offered severance agreement or not. We consult you on the process and try to determine whether or not there are other claims you should not waive by signing an agreement.