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Employment Law/Severance Agreement


QUESTION: Hello Margaret,

This is a follow-up to help I sought a few months ago which Frank kindly answered.

My job with a very small nonprofit (call it OrgA) here in Indiana was eliminated after 10 years of work in July 2012. No FTE remain but OrgA did not close its doors. Four other staff members were offered a job with the for-profit company (Company B) that took over serving our customers. I was the only that did not get an offer. One of the four was an intern (call him Zach) until Feb 2012, he became permanent in March. Zach had severe attendance issues but still managed to get an offer from Company B. Before he was finished at Org, he was let go due to being MIA for customer appointments & more.

I was offered 1 month of severance and advised verbally I could seek legal help. I was to have 21 days to review. I was quite shaken by all this and could not even face opening up the agreement. Exactly 21 days later, I notified orgA that the agreement given to me was in fact intended for Zach (had his title on it). I asked for a corrected copy and have NEVER received one (have record of this). I was confused about why orgA would write up an agreement to someone who was to my knowledge let go for cause. I have no proof that he was actually given a severance check though.

Imagine my surprise when I inquired about the agreement recently and was told because I "did not accept the agreement in 21 days, there is no agreement". I am also being told OrgA will now close its doors and that there is no money left.

I am very dismayed over this. I was not offered any COBRA. Vacation pay out has not been made either, and as you will see from the link above, I had expenses of $1000+ that have gone unreimbursed. I have accountability in this because I did not file them for a long time (this is also the case with another staff person who did get reimbursed).

The person who is the primary contact on all this is a temporary leader that was brought in earlier this year. Aside from the facts, it feels as though this is personal. I have inquired about legal help and it is cost prohibitive for me. My ideal situation would be that I never have to deal with this person again! I also want what is rightfully mine.

Thanks in advance for reading through my essay!

ANSWER: Mary - The previous answer to your questions was fairly comprehensive and I'm not sure what you remain confused about.
COBRA only applies to companies that have twenty or more employees, so it does not apply to you.  You would have to file a wage claim with the Indiana Department of Labor to recover your unpaid vacation days.  Severance is contractual, not based on state or federal law.  If your employment agreement mandated severance when employees left the company, you should add that to your wage claim.  You did not have a right to your job under US law (almost no one does), so you cannot do anything about having lost the position.  I hope you filed for unemployment, to which you should be entitled. Unreimbursed work expenses can be claimed on your federal income tax return for the year in which they were incurred.
If there remains a question for which you have not received an answer, please write back and let me know what it is.

---------- FOLLOW-UP ----------

QUESTION: My concern is largely about the 21 day period I was given to respond to the severance offer. I responded on the 21st day that the agreement OI was actually given electronically was wrong and addressed (by job title) for another employee. The employer is telling me they will not pay because I did not accept it in the 21 day period.

They are also telling me there is no money left as the company os closing down.

Thank you.

Mary - Because severance is not required, nor do you seem to have had a written employment agreement granting you severance, you have no legal claim to the money.  However, you can contact the Labor Department in your state and ask whether they will assist you in obtaining the money.  If they turn you down, short of suing the former employer, you have no other legal recourse.

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Margaret M. deMarteleire


I can answer most questions about employment law, federal or state. I am an attorney, not an HR professional, so questions about HR careers, coursework, prospects, etc. are not within my scope.


Attorney for 20 years, currently working exclusively with employment law - FLSA, FMLA, federal contracts, pay, etc.

Temple University School of Liberal Arts, BA, Rhetoric & Communication, 1982 Temple University School of Law, JD, 1990 Certificate in HR, Cornell University ILR School, 2006

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