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Ask Law Educator, Esq. Your Own Question
Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Employment Law
Satisfied Customers: 111526
Experience:  20+ Years of Employment Law Experience
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My employer stopped matching my 401k, announced no raises,

Customer Question

My employer stopped matching my 401k, announced no raises, said the BOD ordered a 10% across the board pay cut that has not been implemented yet, increased the cost of my health insurance at the same time they announced the 401k match cessation, suspended pension funding, and pushed out our bonus payments by two months (this coming May)... then they filed bankruptcy (Chapter 11) this week. I missed two rounds of severance and have been retained but I don't want to be here anymore because I cannot afford all the benefits cuts. Am I still on the hook for repaying relo under a three year prorated contracted since they so drastically cut the benefits and compensation that attracted me to take this job a little over a year ago? When I researched this company thoroughly, they had solid liquidity and no indication of financial trouble. I have a new job offer and want the relo contract nullified. Did they cause a breach by cutting my benefits and bonus and raise opportunities?
Submitted: 9 months ago.
Category: Employment Law
Customer: replied 9 months ago.
See the attached signed repayment agreement and the most recent notice about cutting benefits as well as a link to the company's bankruptcy filing where they may have address which contracts they choose to reject or retain.https://cases.primeclerk.com/noranda/Home-DocketInfo
Customer: replied 9 months ago.
When I mention that I was retained, I have not been given a retention bonus... I simply wasn't severed in the two rounds of cuts that occurred the past couple of weeks and was told in a group announcement to my department that there will be no more cuts to my particular department.
Customer: replied 9 months ago.
See a copy of my accepted employment offer letter where they list the benefits which enticed me to accept the position in the first place and have since taken away.
Expert:  Law Educator, Esq. replied 9 months ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
First off, unfortunately in your employment agreement it says the words "in accordance with our current benefits..." this makes the agreement subject to change when the employer's benefits change. This is a clause used that allows the employer to modify benefits as necessary or as they deem proper. So in these times where economic cuts are being made, if they are modifying benefits, they can legally change those benefits to you and you would not have recourse legally as it does not guarantee you the ongoing benefit by the wording they have used.
Second, you want them to lay you off, if you quit then they can come after you for reimbursement. I know you were hoping for severance, but the employer is going to lay off employees whose severance costs them less than other employees. So in your case, they know that they will have to forgive the reimbursement and that is why they are trying to force you to quit. Unfortunately though, this means you have to continue working pursuant to the terms of that agreement because if you leave even with them cutting the benefits, they will be able to enforce the reimbursement since the agreement wording means they could modify those terms.
Customer: replied 9 months ago.
Doesn't the fact that the contract is prepetition in the bankruptcy my company filed have any bearing on whether or not the can still force me to repay?
Expert:  Law Educator, Esq. replied 9 months ago.
Thank you for your reply.
Actually, even if they are in bankruptcy, the money that you owe in reimbursement is an asset of the bankruptcy estate and the bankruptcy trustee will pursue you to collect because that money is collected to pay creditors of the bankruptcy estate.