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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: California Employment Law
Satisfied Customers: 116780
Experience:  JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
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After 25+ years, I was notified of forced lay-off on 6/26/15

Customer Question

After 25+ years, I was notified of forced lay-off on 6/26/15 with a severance benefit package of 6 months salary and 6 months subsidized medical; after my last day, 8/25/15, due to the modified rule of 75, I was changed to a retiree status, to my total financial detriment. I am 57 and will be penalized if I take early distributions from my pension and/or 401k; ;, was told I was no longer eligible for severance pay by the Benefits group; but HR said to sign and return the General Release and I could get the severance pay. Was told I could not get unemployment because I retired, and I somehow have to make a monthly medical contribution of $715.44, going to $796.05 in 2016 or I can take COBRA at $518.44 per month. As a active employee, my contribution was $181.00 per month which included $150.00 per month to FSA account and under severance would have been subsidized for 6 months. No one can explain the high retiree monthly contribution and the company (AT&T) says that the plan is under ERISA and nothing can be done to change my status. I found out that I 'retired' when I received a letter of congratulations and a gift catalog! I thought it was just a honest mistake but soon realized that it was done after my last day. I was never sent any information saying I would be forced to a retiree status due to "M75" nor was it stated, or clearly stated, exactly what age + service eligibility meant or would mean. I can't find one word of Modified Rule of 75 in all the severance paperwork we were given and the 2 age + service examples used were less than 75 and we weren't given any examples or explanations of potential negative consequences , or even told that there could be some very unfriendly former employee benefits. I did received a plethora of paperwork covering the forced severance offer. AT&UT said there was no appeal to change my status, but why didn't they tell me in June that I would be receiving 'benefits' as a retiree and not severance benefits as a former forced severance employee? Now I must sale my house to pay the medical contribution or face a tax penalty for lapsed coverage; am I truly trapped in retiree status when I was laid off under Forced Severance and am impacted so negatively?
Submitted: 1 year ago.
Category: California Employment Law
Expert:  Law Educator, Esq. replied 1 year 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.

Under California law, forced retirement is generally found to be illegal. The California Fair Employment and Housing Act protects people who are at least 40 from age discrimination at work. The FEHA prohibits mandatory retirement with a few exceptions: tenured faculty members at colleges, if the institution permits reemploying the individual on a year to year basis; any physician employed by a professional medical corporation who is at least 70; and an executive who is entitled to a retirement benefit of at least $27,000 a year.

So, if you are not in one of the above categories (it does not sound like you are) then you need to file a complaint with the CA Fair Housing and Employment Administration and also with the EEOC for age discrimination in them placing you into forced retirement status and they have to investigate and grant you a right to sue to take the employer to court to challenge this forced retirement which is really a layoff as you describe it.

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