Severance Agreement: Acquisition w/Employee Transfer

[lkevinl]

What is the name of your state? CALIFORNIA

I have a severance agreement with my Employer part of which states:
"The Company will provide a severance package (compensation and standard benefits) for a period of three months, if the Company elects to terminate your employment."

My Employer entered into an agreement with another company where the other company would acquire our technology and 40 employees of which I'm one. My Employer will still exists after the transaction is complete. The other company has presented the group of 40 with offers of employment. My current employer has stated that if we choose not to accept and sign the offer from the other company, that our positions will be eliminated.

The new company's employment offer states that prior to the start date, Employee shall resign Employee's position with the current employer and on the start date Employee shall be hired by the new company.

I'm inclinded to sign the new offer but I'm holding off because I'm worried that my current employer will not honor my severance agreement. I've approached my current employer suggesting that they still honor my severance agreement whether I sign the new employment offer or not.

They've suggested that if I sign the new agreement, they will not honor the severance because it is my choice to accept new employment or not. If I choose not to sign, they will pay out my severance.

I feel that they are trying to get out of honoring my pre-negotiated benefit by trying to pretend that this is a normal situation as if I chose to find new employment, accepted an offer and resigned. I didn't do that though. The fact of the matter is, they negotiated with another company, consented to that company making employment offers, then told us that our jobs would be eliminated if we don't accept that offer.

One way or another, my current employer is forcing a change to my career. I didn't make the choice to make a change. I originally negotiated a severance package for increased security. The new company is a big unknown for me. I didn't choose them and didn't choose for any of this to happen. I believe this makes me still eligible to collect on this severance since either way, my company is eliminating my position.

Do I have a case?

 

[cbg]

No. In fact, you're quite lucky that they will consider paying if you turn down employment. The only way I see that you would be entitled to severance is if you were not offered to have your employment retained at all. It's rare indeed that severance is available to those who turn down work; it's unheard of to provide if if you are still working.

 

[lkevinl]

This severance is a negotiated benefit. It is not offered to all employees. I was planning to leave the company several years ago and they requested I stay. I negotiated some benefits in exchange for my commitment to stay with the company including 3 months of severance pay.

Isn't this similar to deals the officers of a company might have? An officer of a company would certainly pursue and be granted a severance treating the terms literally. If a position is eliminated, the company is terminating you. I could be terminated by the new company 1 week if if they so choose. I didn't choose to make a career change, it is being forced upon me. Why shouldn't I apply the terms of this literally as well. My agreement doesn't say that my company doesn't have to pay me severance if they find me a new job.

I guess the bottom line is I requested this severance as a way to provide additional security for myself and my family. There is no guarantee of that at the new company and by signing, I may be signing away my benefit.

 

[lkevinl]

No. In fact, you're quite lucky that they will consider paying if you turn down employment.

Why lucky? If I turn down employment with a third party, my employer will eliminate my position. As I mentioned, my agreement states that if the company elects to terminate me, they'll pay severance. Which part of that is luck? If I don't sign, they'll elect to terminate and abide by the agreement.

I'm just suggesting that this is a matter of order. If I sign, then I'm resigning. The reality is that they've already decided to eliminate my position regardless of if I sign the other agreement or not. They're basically saying I'll be terminated at a later date. I may be inclined to sign simply for the fear of not having a pay check.

 

[cbg]

You asked my opinion, I gave it to you. My opinion is that severance is not due when you are working. If you want to pay at attorney to fight the other side of the question, it's your money.

 

[ecmst12]

Take the agreement you signed to a contract lawyer in your area for a specific legal opinion.