Severance

Severance is a particularly tricky area under ERISA. Sometimes severance benefits fall under ERISA. Other times they do not. From the employees’ point of view, it is almost always better to avoid ERISA. Most employees desire to escape ERISA while the goal of the employer is to bring the benefits claim under the ERISA umbrella. Most employers will vigorously argue that its severance policy falls under ERISA which preempt “any and all state laws insofar as they may now or hereafter relate to any employment benefit plan,” 29 U.S.C. § 1144(A). "As is typical in these ... preemption cases, a removing defendant tows the case into the federal harbor only to try to sink it once it is in port.” Tracy v. Principal Insurance Group, 948 F. Supp. 142, 143 (D.N.H. 1996).

In general, in order for an employee benefits arrangement or policy to be considered an ERISA plan, it must "require the creation of an ongoing administrative program." ERISA only covers plans, rather then the simply benefits paid to employees. In other words, labeling a severance policy as an ERISA plan, and even following some of the formalities of ERISA, is not enough to bring a severance policy under ERISA law. If the so called plan lacks substantive continuing administration and financial obligations, the severance policy is unlikely to be governed under ERISA. For example, a severance policy that is calculated by multiplying weeks of severance against years of service is often not enough to bring the plan under ERISA.

Helping You Obtain Maximum Severance Benefits.

Our firm may be able to secure severance benefits for you if your employer wrongly denies benefits that it agreed to provide. This may be pursuing your claim for severance benefits under ERISA when necessary, or proceeding with a breach of contract or Wage Act litigation if applicable to your situation. Contact Jonathan M. Feigenbaum, Esquire, in Boston, Massachusetts. We can be reached by phone at 617-367-8787 or through the intake form on our Contact Us page.