When HR Makes a $2,666,594.03 Mistake

We’ve all made mistakes at work, but have you made a $2,666,594.03 mistake? On one employee? Hold onto your hats, because you don’t want this to happen to you. Here’s what happened.

Trico Products Corporation laid off Francois El-Hayek after 28 years of service. He was supposed to receive 34 weeks worth of severance pay in exchange for signing a general release. (A general release is a legal document that basically says in exchange for this severance I won’t sue you–except for things that you can’t legally waive.) This is all pretty standard in a lay-off situation. At the time of termination, El-Hayek was earning $123,585 per year, so with 34 weeks of pay that should be $80,805.97. Not a bad amount of severance. (Although for the record, I recommend a minimum severance of two weeks per year of service, but no one asked me.)

To keep reading, click here: When HR Makes a $2,666,594.03 Mistake

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6 thoughts on “When HR Makes a $2,666,594.03 Mistake

  1. Yipes! o_O

    As tempting as it would be, if a company I worked for did this, I don’t think I’d sue. I’d go straight back to them and say, “I think there’s been an error.” If they overpay and you spend it on a Maserati or something, you WILL have to pay it back.

    I don’t know where you laid off people that they had time to take home documents and have them reviewed. Both times I was laid off, we had to pack up and leave that day. The one time I got severance (six weeks, one for each year), I was given time to read the document but I had to sign it right there.

    1. If you’re over 40, it’s illegal to require a same day signature.

      I don’t trust any legal document that someone won’t allow my lawyer to review.

  2. I don’t know, you send me packing after 28 years of service, and I have to hit the job market in my 50’s or later when said market is not always receptive to older workers? Maserati’s aren’t big enough for my dogs, but heck yes, I”m going shopping.

    Out of curiosity, why two weeks per year of service? (I think it’s entirely reasonable, but I’ve worked with folks who roll there eyes at anything more than one week per year – and even think that’s over-generous)

  3. I just did a reduction yesteday, and I had to double check the agreement just now! What a nightmare mistake. We always give employees time to review documents.

  4. As a person who was laid off by a company ( whose business expertise caused downsizing and eventual bankruptcy closing of company), I would want to receive as much possible in settlement. What is not discussed in this article, is the fact that the higher up corporate personnel will be trying to take the lion share of the final settlement, not caring what the employees get.
    In the situation, I faced with the layoffs, the settlement amounts were determined by length of time with company ( one week of pay per years worked). As I live in a state that requires companies to give a 90 day notice for any layoffs, I had the time to consult a lawyer and also use up all my personal time and vacation time which is never included in these severance packages.
    As I have one of those books titled entitled–Your Rights in the Workplace, I also know that some things assume as rights are not set in stone but are determined by geographic area and type of company. I consider that a must read for workers to know when considering job searches. As a HR person, I am sure the author knows these laws that cover certain jobs and employment.
    There has been a big trend in the last few years to push for Right to Work laws, but those pushing this don’t realize badly it cuts into what we assume is a right to a benefit at work, like in this situation–layoffs. In an area/state that has right to work law in place, one can be laid off without notice ( the situation described about where you are handed papers to sign and told to leave immediately). In this growing trend, most workers have no room for negotiations and are forced to accept settlement if they get any and leave.

  5. Maria, depending on how it’s actually defined at least vacation time should be paid out, regardless of severance, that’s what typically happens if you quit with vacation time on the books. Sick time is often not paid out.

    To the best of my knowledge there is nothing preventing the company from making you use whatever vacation/personal time balance up during that 90 day period, but that is different than not paying out the time.

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