Termination of Contract by Employer - Severance Pay

[Law237]

Hi,

I recently worked as an at-will, salaried employee at a major firm specializing primarily in federal work in the US. I have worked with this company for the past year and a half. A few days ago, I was given a memo to sign indicating a 40% reduction in salary, as well as the corresponding reduction in work schedule due to a lack of available work. The details of the memo indicated a period of time lasting for a minimum of 60 days (essentially in perpetuity if I were to sign). I let the HR department know that I was not going to sign the agreement, as I viewed this as a change to my original agreement on my salary with the company. From my understanding, the company has every right to terminate my contract at any point it so chooses. However, the company HR manual states that terminated employees (not including terminations due to offenses by the employee) are entitled to severance pay. In my case, I would be entitled to 2 weeks of severance pay. The day after advising the HR department of my decision, I was immediately told that I was relieved of my duties because of my �refusal of available work�. I was not given a two weeks notice, another policy stated in my employer�s HR manual when an employee is terminated due to a reduction in work. Through email and the phone, I have continuously maintained that I did not refuse work, rather I refused the proposed reduction in salary. It seems the company is conveniently using the fact that they gave me a ridiculous offer in order to justify terminating me without paying severance. I am currently considering taking this to court. I just wanted to get some other opinions on the matter.

Thank you.

 

[eerelations]

What state are you in? Did you have a written contract prior to them giving you the reduction-in-pay contract?

 

[cbg]

Let me put it this way.

On the basis of the facts available to us, if I were an attorney and this went to court, I'd rather be representing the employer than you.

 

[commentator]

What you will be likely to qualify for, and what they are apparently trying to avoid is unemployment insurance, which they likely in these circumstances will be charged for, thus causing an increase in their employer taxes for unemployment. They hate that, but since you did the very wise thing, did not accept being "starved out" of the job when they significantly changed the hiring agreement, you should qualify, regardless of your income until you find something else. File for unemployment benefits immediately. Then later you may want to run the whole thing by an employment attorney, though severance is something that usually doesn't come out in the employee's favor.

 

[cbg]

The answer to eerelations' question is actually quite important.

Because unless the OP has a legally binding and enforceable contract of employment that expressly says otherwise (and that does not mean a company handbook) the employer does not need the OP's permission or signature to reduce his hours and his pay. The signature is not permission; it is acknowledgement.

 

[Law237]

What state are you in? Did you have a written contract prior to them giving you the reduction-in-pay contract?

I am in Guam, a US territory. I had an offer letter signed by me and the company stating my salary as well as other terms of employment when I signed with the company. Does this not constitute an implied contract?

 

[cbg]

No, as a matter of fact, an offer letter very rarely meets all the elements of a contract, implied or otherwise.