Severance package?

[endobear]

Company my wife's been with for 18 years has been sold. She had a great severance package with the previous company.
The writing is on the wall that she may be loosing her job with the new company.
They have their own people that do what she does and they are eliminating some of her responsibilities and her title has changed to a totally crap one.
My questions are. If the new company eliminates her position and let's her go is she still eligible for the severance the old company offered? Does she start over with the new company as a new employee as far as seniority and severance packages go?

 

[ArizonaKevin]

Company my wife's been with for 18 years has been sold. She had a great severance package with the previous company.
The writing is on the wall that she may be loosing her job with the new company.
They have their own people that do what she does and they are eliminating some of her responsibilities and her title has changed to a totally crap one.
My questions are. If the new company eliminates her position and let's her go is she still eligible for the severance the old company offered? Does she start over with the new company as a new employee as far as seniority and severance packages go?

I would guess that officially they wouldn't owe her a severance package that was offered by a previous company (bigger question, why was previous company offering severance if she wasn't being let go by them?). But, one would hope that the new company would honor her original start date and factor that into how they offer severance for employees of similar tenure.

Would be a nightmare to try to manage different severance packages based on different acquisitions that were made.

 

[EBT531]

I went through a buyout 2yrs ago. They do not "have" to honor any of the old company policies once you are officially a XXXX employee (whatever the new company is). BUT most offer a decent package if they are publicly traded as they don't want the backlash hitting the news and social media.

 

[endobear]

I would guess that officially they wouldn't owe her a severance package that was offered by a previous company (bigger question, why was previous company offering severance if she wasn't being let go by them?). But, one would hope that the new company would honor her original start date and factor that into how they offer severance for employees of similar tenure.

Would be a nightmare to try to manage different severance packages based on different acquisitions that were made.

She wasn't offered a severance from the old company. Its company policy. She just knows what was given to other employees in the past at her level who's positions were eliminated or laid off.

 

[ArizonaKevin]

She wasn't offered a severance from the old company. She just knows what was given to other employees in the past at her level who's positions were eliminated or laid off.

gotcha makes sense. Then I would anticipate the severance to be in line with what employees from the new company would receive if they had 18 years worth of tenure. Who knows, maybe it would be more/better than what the previous company would offer?

 

[Xtrmwakeboarder]

Did she have an employment contract that stated the severance offered by her previous employer? Did she sign a new employment contract with the new company?

I'm not a lawyer, but if she doesn't have anything in writing, and it was just a policy, she's probably SOL.

 

[SBMech]

If it's still in the middle of being sold/transitioned, have her quit now!

I doubt the new company is obligated to honor the previous agreement.

 

[ChumpChange]

If it's still in the middle of being sold/transitioned, have her quit now!

I doubt the new company is obligated to honor the previous agreement.

Quitting doesn’t get a severance. Quitting is just ….. quitting.

 

[rivermobster]

Every buy out I lived through, I had to be re-hired by the new company. Drug test and all.

The Only thing they honored was my vacation time.

 

[endobear]

I went through a buyout 2yrs ago. They do not "have" to honor any of the old company policies once you are officially a XXXX employee (whatever the new company is). BUT most offer a decent package if they are publicly traded as they don't want the backlash hitting the news and social media.

It is a large publicly traded company.

 

[SBMech]

Quitting doesn’t get a severance. Quitting is just ….. quitting.

I was assuming she had a contract. Like if the business is sold...golden parachute etc.

 

[endobear]

gotcha makes sense. Then I would anticipate the severance to be in line with what employees from the new company would receive if they had 18 years worth of tenure. Who knows, maybe it would be more/better than what the previous company would offer?

The acquisition was just completed. The new company has not yet posted their severance policies.

 

[jetboatperformance]

Buy/sells are quite common in the Auto business (for example) ... most I went thru were OK coming out the other end none the less "unsettling" Good Luck

 

[Bpracing1127]

Tell her to start looking now

 

[endobear]

Did she have an employment contract that stated the severance offered by her previous employer? Did she sign a new employment contract with the new company?

I'm not a lawyer, but if she doesn't have anything in writing, and it was just a policy, she's probably SOL.

No employment contract with the previous employer or the new one.

 

[RVR_RCN]

Is severance policy written into employee handbook? curious what they are offering, old Co that is. As far as new Co, they will probably make their own rules, She should negotiate a new employee contract if possible. personally I think once you exceed 10 years, 1 week pay per year is fair!

I am in a similar position, 33 years in with a contract severance of 26 weeks as of right now. Company is being sold so I will have to renegotiate with new owners I imagine.

 

[ArizonaKevin]

The acquisition was just completed. The new company has not yet posted their severance policies.

Can't speak for other companies, but we don't post our severance policies (at least to my knowledge) because we tend to modify severance based on the reason for termination.

 

[rivermobster]

No employment contract with the previous employer or the new one.

What state?

CA is an "at will" state. No contact means you can quit at anytime, or you can be terminated at anytime.

 

[Bpracing1127]

Can't speak for other companies, but we don't post our severance policies (at least to my knowledge) because we tend to modify severance based on the reason for termination.

This

 

[Singleton]

Can't speak for other companies, but we don't post our severance policies (at least to my knowledge) because we tend to modify severance based on the reason for termination.

This. Most public companies will not post packages. Unless they are being acquired and the packages are part of the agreement. When the company I worked for was acquired, the severance package was posted by level in the purchase agreement and then additional items were added that were not made public.

 

[RVR_RCN]

I have been told by HR professionals that if you are terminated and in good standing, downsized or whatever, and a severance is offered that you can always counter and in a lot of cases a compromise will be reached. worst they can do is say no.

 

[endobear]

What state?

CA is an "at will" state. No contact means you can quit at anytime, or you can be terminated at anytime.

Colorado.

 

[rivermobster]

Colorado.

She should be putting her resume together then...

 

[pronstar]

There’s no law dictating severance.
So you’re sorta stuck in limbo, waiting to see what the severance package will be.

IMHO you have a greater chance that a big company won’t offer a shit sandwich, since they have a public reputation and deeper pockets than a smaller company.

The severance I’m hearing folks getting these days is shit.
I was lucky, when I got laid off (15 total years with the company, 10 years consecutive when let go), I got my regular paycheck for almost a year.

 

[Xtrmwakeboarder]

Can't speak for other companies, but we don't post our severance policies (at least to my knowledge) because we tend to modify severance based on the reason for termination.

Same

 

[Xtrmwakeboarder]

What level is she at? VP+? If so, I would think she would have had equity in the former company, which is where you get your golden parachute/handcuffs, depending on the situation.

 

[steamin rice]

To echo some previous comments, the new company is most likely not obligated to offer the same severance package that the acquired company offered. Hopefully the new company will use her original start date with the previous company as the basis for severance.

 

[endobear]

Is severance policy written into employee handbook? curious what they are offering, old Co that is. As far as new Co, they will probably make their own rules, She should negotiate a new employee contract if possible. personally I think once you exceed 10 years, 1 week pay per year is fair!

I am in a similar position, 33 years in with a contract severance of 26 weeks as of right now. Company is being sold so I will have to renegotiate with new owners I imagine.

Severance levels were written in the previous company handbook but it also states that its up to them and can be terminated at any time.
She's eligible for 2 weeks pay per year after one year. SVPs get 2 years salary according to the handbook.
New company eliminated an SVP that my wife knows and he got the 2 years.

 

[Cole Trickle]

My wife got laid off by a fortune 500 company 2 years ago after being there for 17+ years.

She was part of the first wave of layoffs and got a very fair/good severance package.

Lets just say the next several rounds of layoffs were offered much less and then eventually almost nothing.

I think they start off trying to do the right thing and then eventually the zeros start adding up.

 

[endobear]

What level is she at? VP+? If so, I would think she would have had equity in the former company, which is where you get your golden parachute/handcuffs, depending on the situation.

Shes a Senior Corporate Sponsorship Parter VP.
No equity in the former company.
She does have a great relationship with the previous company that owned hers. She will most likely be in contact with the people she has relationships with there to see if they have any positions available.

 

[RVR_RCN]

Severance levels were written in the previous company handbook but it also states that its up to them and can be terminated at any time.
She's eligible for 2 weeks pay per year after one year. SVPs get 2 years salary according to the handbook.
New company eliminated an SVP that my wife knows and he got the 2 years.

Wow, that seems like a very generous severance, hope they honor it.

 

[rivermobster]

Shes a Senior Corporate Sponsorship Parter VP.
No equity in the former company.
She does have a great relationship with the previous company that owned hers. She will most likely be in contact with the people she has relationships with there to see if they have any positions available.

A good friend has her resume uploaded to Indeed...

A company contacted her over a month ago and wouldn't let up!

She just signed an offer letter from them today for a Way better position than she currently has.

Good people are Hard to find.

 

[endobear]

Wow, that seems like a very generous severance, hope they honor it.

So does she!

 

[farmo83]

In the oil industry it's fairly common to have a claw back for severance.

My Mom worked for an oil company for 30 ish years. Chevron (the company I work for) acquired their company. Mom actually asked for a package they were offering and she was offered a roll so she did not get a package, however if she was let go within 3 years for "non-performance reasons" she was eligable for the original package. After she came over they downsized her group a few months later and she got her package then.

Another friend of mine worked for Anadarko when they got acquired by OXY. I think their claw back was 3 years as well.

 

[ChumpChange]

What level is she at? VP+? If so, I would think she would have had equity in the former company, which is where you get your golden parachute/handcuffs, depending on the situation.

Why would you think someone would have equity because of a title? Titles are generally meaningless to business ownership.

 

[Xtrmwakeboarder]

Why would you think someone would have equity because of a title? Titles are generally meaningless to business ownership.

Equity is generally granted to those at higher levels due to their importance to the company. Agree? That's been my experience at several companies. I'm talking about options in the case.

 

[ChumpChange]

Equity is generally granted to those at higher levels due to their importance to the company. Agree? That's been my experience at several companies. I'm talking about options in the case.

Not really. Not for privately held companies. There are plenty of CEOs and other executive (EVP) level employees that work for private companies that don’t have any equity stake in a company. They just get paid as employees.

As for publicly traded companies, I would agree that there are generally some stock options for high performing / high level employees but those would never be restricted from a severance package but mainly a time package.

It all depends on company ownership and structure.

 

[pronstar]

Yeah stock options/packages are typical reserved for senior execs.

 

[Xtrmwakeboarder]

Not really. Not for privately held companies. There are plenty of CEOs and other executive (EVP) level employees that work for private companies that don’t have any equity stake in a company. They just get paid as employees.

As for publicly traded companies, I would agree that there are generally some stock options for high performing / high level employees but those would never be restricted from a severance package but mainly a time package.

It all depends on company ownership and structure.

Getting a little off-topic here, but maybe I've been lucky. 3-1 of mine have been private or PE, with one at a public company.

I was hoping she had some options and hadn't been paid out yet as part of the recent acquisition. That could offset the lack of the severance package her previous employer had. Either way, it doesn't look like that's the case.

 

[ChumpChange]

Getting a little off-topic here,

Off topic on RDP?

 

[Orange Juice]

Company my wife's been with for 18 years has been sold. She had a great severance package with the previous company.
The writing is on the wall that she may be loosing her job with the new company.
They have their own people that do what she does and they are eliminating some of her responsibilities and her title has changed to a totally crap one.
My questions are. If the new company eliminates her position and lets her go is she still eligible for the severance the old company offered? Does she start over with the new company as a new employee as far as seniority and severance packages go

Hopefully when they hand her a shoe box of her personal belongings, they include something to get her by for the next two months.

 

[TCHB]

New company not responsible for the old companies benefits.

 

[Flatsix66]

It's becoming more popular to negotiate a severance for someone in a leadership position to help a smooth transition during a company buyout.

Getting Laid Off? 3 Tips for Negotiating a Severance Package

Workers who are laid off frequently get severance. Here's how you can negotiate a better deal.

www.fool.com

 

[endobear]

A good friend has her resume uploaded to Indeed...

A company contacted her over a month ago and wouldn't let up!

She just signed an offer letter from them today for a Way better position than she currently has.

Good people are Hard to find.

Yeah. I'm confident she will find a new job easily. Shes great at what she does, faily young, smokin hot and has always gotten exceeds expectations on her reviews. Over the years she has had a bunch of people tell her if she's ever looking for a new job to let them have the 1st Crack at her.
About 4 years ago her company quit doing sponsorship stuff on a local level and eliminated her position.
She immediately got picked up for the national team with a title increase, pay increase and the ability to work from home 100% other than about 1.5 months a year traveling.

She was updating her LinkedIn this morning and noticed someone from the new company was checking her account a few weeks ago..

 

[rivermobster]

Yeah. I'm confident she will find a new job easily. Shes great at what she does, faily young, smokin hot and has always gotten exceeds expectations on her reviews. Over the years she has had a bunch of people tell her if she's ever looking for a new job to let them have the 1st Crack at her.
About 4 years ago her company quit doing sponsorship stuff on a local level and eliminated her position.
She immediately got picked up for the national team with a title increase, pay increase and the ability to work from home 100% other than about 1.5 months a year traveling.

She was updating her LinkedIn this morning and noticed someone from the new company was checking her account a few weeks ago..

Awesome. Best of luck to you both.

 

[samsah33]

Depends on the form of the transaction. Typically, if it's an asset sale, then your wife is now an employee of the new company. If it's an equity purchase, then she's likely an employee of the old company.

If you're not sure about the form of the transaction, then a good indicator is whether or not she (or other employees) were paid out accrued vacation when the deal closed: if people were paid out, then that's because they were terminated from the old company and rehired at NewCo. I guess you can also look at the FEIN on her paycheck stub to see if it's NewCo or OldCo...?

If she was previously offered a severance from Oldco but declined, then she's probably not eligible for anything now since packages typically have expiration dates. This could also be another round of layoffs coming, so the offer might be on the table again. She should try to go out to lunch with someone from HR, sometimes details "slip out..."

These are generalities and depend on terms of the deal. I've seen some deals where EE's were "transferred" to Newco and have retained their seniority and accruals but were terminated from Oldco without payouts.