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About Timmy Chou
Expertise
I am a experienced Mediator and a partner in a management consulting firm. As a mediator I work as a third-party neutral and specialize in partnership/shareholder disputes, management/labor issues, company culture difficulties, and family-owned business problems. I can help describe why alternative dispute resolution may be a good choice for you. As an experienced management consultant I may be able to offer creative ideas to help resolve your organizational and business problems and disputes. "If you say conflict, I say opportunity".

 
   

You are here:  Experts > Business > Corporate Law > Arbitration/Mediation > Termination without Notice or Cause/Severance Pay

Arbitration/Mediation - Termination without Notice or Cause/Severance Pay


Expert: Timmy Chou - 1/30/2009

Question
I was laid off on 1/13/09 after 4 years of employment.  I was given no notice or severance pay.  I have never been "written up" forany violations.  My employment contract states that if you are employed for 13 months or more, you will be given either 2 weeks notice or severance pay in lieu of notice.  If you are terminated for misconduct then neither notice or severance will be paid.  I also was supposed to be evaluated to determine my bonus for the 4th quarter and the employer said he "decided not to give the bonus" because he couldn't afford it.  His reason for the lay off was also that he couldn't afford me.  He did not ask if I would take less money, he just said he had hired someone else that would take less money.  Since I was not fired for misconduct, don't you agree that the bonus and severance pay are due me.  I have sent him a certified letter demanding the amount due and he has not responded.  What can I do now.  He also laid off the other employee and gave her the same reasons.

Answer
Thank you for your question!

As I always note to questioners, mediators act as neutral third parties to disputes and never "get involved" in judging the merits of conflict, but merely use special techniques to help the parties decide how to negotiate their own settlement.

The case you describe here is very typical and can be considered a "classic" HR dispute presentation.  I cannot mediate this with you alone but I can respond to your question from my business consulting experience.

Note that this may have legal factors and you may wish to consult a labor attorney.

I often tell people that it may be useful to consider that right and wrong are not always the most useful places to begin in dealing with these sorts of problems.  For most large organizations there is only expedient and inexpedient.  Also, there is a cost to exacting justice and the costs can be quite high.  Remember that your person-hood and your work are not even remotely related and that the most successful people at work are often the least successful with others since they have often become successful on the bodies of those they have slain.

You are dealing with authority figures or owners who are only interested in the path of least resistance in terms of how they manage the business.  I'm guessing they could care less about you so don't put too much investment in your position.  You were terminated for business reasons and now you must create a business reason to deal fairly with you.

It appears that you are due the compensation you claim.  Please begin by documenting a very careful chronology of events as they have occurred.  Names, dates and locations.  Put things in writing at this point as you have done.  In most states you can be fired for just about any reason without a problem.  These are known as "right to work" states.  However, you cannot be treated differently than other workers nor can your contract be violated.

Many states have Employment Commissions or other employment offices where you can file a complaint for free.  You should contact them right away and file a complaint.  You may also be able to file a complaint with the US Dept of Labor.  Find their offices.

It is often true that the manager or officer has the final say concerning your disposition at your company.  However, whether management responds or not, you want to be sure that HR has your materials in your employment file as it is HR that maintains your employment record.  It sounds like you may be at the end of the written policy on handling grievances, so there may not be a procedure that allows you to mediate or address the matter.

Be sure to send copies of your demand letter and any other proof or correspondence.  Your company must see that it will cost a lot more to deal with all the problems you will cause them for their practices and then they will make a business decision and settle fairly with you.  

These are some ideas.  Feel free to follow up with additional questions.

For your information, the pros and cons of the types of dispute resolution methods follows.

GOOD LUCK!

Arbitration, Mediation, and Litigation

Arbitration: the referral of a dispute to one or more impartial persons for final and binding determination outside of the judicial system

Benefits of Arbitration:
    Confidential, no public record
    Limited exchange of documentation, information
    Quick, don't have to wait for a court date
    Arbitrators have expertise in the subject matter and are trained in conflict resolution
    Cheaper than litigation
    Preserves business relationships

Negatives of Arbitration

    It's a compromise, no 100% winner
    Complex arbitration can be costly
    If not satisfied, may litigate the arbitration procedure
    Poor results with an unskilled arbitrator
    Both parties must agree to cooperate in the process

Mediation: the process by which parties submit their dispute to a neutral third party (the mediator) who works with the parties to reach a settlement of their dispute.

Benefits of Mediation:

    Neutral mediator can objectively suggest alternatives not considered before
    Parties are directly engaged in negotiating the settlement
    Can be quicker than litigation
    Less costly than litigation
    Preserves business relationships
    85% of American Arbitration Association cases mediated find successful solutions

Negatives of Mediation

    may not reach a binding decision
    unskilled mediator

Litigation: using the judicial system to resolve disputes

Benefits of litigation:

    a clear winner and loser
    uses a prescribed set of procedures
    more predictable outcomes
    is final

Negatives of Litigation:

    waiting for court dates can do more harm
    usually more expensive than mediation and arbitration
    part of the public record

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