Severance Agreements

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As you may have heard, Steve Easterbrook was recently dismissed from his position as President and Chief Executive Officer of McDonald’s due to his alleged consensual relationship with a staff member, which was against company policy.  It was also reported that he will receive a severance package of nearly $42 million – comprising six months…

Read More McDonald’s CEO Stephen Easterbrook Terminated Following Relationship With Employee
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In Lord v. Marilyn Model Mgt., Inc., 2019 NY Slip Op 05093 (App. Div. 1st Dept. June 25, 2019), the court reversed the lower court’s dismissal of plaintiff’s claim for breach of contract arising from defendant’s failure to pay him severance. The facts, as summarized by the court: As alleged in the complaint, plaintiff was…

Read More Modeling Scout Sufficiently Alleges Claims Relating to Failure to Pay Severance, First Department Holds
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In Chandler v. Houghton Mifflin Harcourt Publishing Co. et al, 2018 WL 357294 (N.D.N.Y. Jan. 10, 2018), the court dismissed plaintiff’s claims of, inter alia, sexual harassment. In an attempt to evade dismissal, plaintiff argued that the terms of the Separation Agreement and Release she executed “have been invalidated due to the actions of Defendant”…

Read More Sexual Harassment Claims Dismissed in Light of Settlement Agreement and General Release; Defendant’s Actions Did Not Violate “One Sided” Confidentiality and Non-Disparagement Provisions
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In Ruiz v. Lenox Hill Hosp., No. 160377/15, 2017 WL 213802 (N.Y. App. Div. 1st Dept. Jan. 19, 2017), the First Department affirmed (in part) a lower court’s decision addressing plaintiff’s claims under New York’s general and health-care whistleblower laws (N.Y. Labor Law §§ 740 and 741) Here are plaintiff’s allegations, as summarized by the court:…

Read More Surgeon’s Whistleblower Claim Survives Dismissal
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In Cohen v. National Grid USA, 2016 NY Slip Op 05786 (App. Div. 2nd Dept. Aug. 17, 2016), the court stated and applied the following employment law principle: Provisions contained in company policy manuals which, like the one in this case, can be amended or withdrawn unilaterally, do not constitute enforceable obligations owing from an employer to…

Read More Company Manual Did Not Create Enforceable Right to Severance
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In O’Grady v. Bluecrest Capital Mgmt. LLP, No. 15-CV-1108 SHS, 2015 WL 3740701 (S.D.N.Y. June 15, 2015), the court dismissed, under FRCP 12(b)(6), plaintiff’s claims for a bonus and severance pay. This case illustrates that courts will look to the terms of an employee’s employment agreement when assessing those claims. As to plaintiff’s claim for a…

Read More Court Rejects Terminated Employee’s Claim to Bonus and Severance
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Now this requires chutzpah. A New York appellate court recently struck down plaintiffs’ attempt to sue their former employer for employment discrimination – three years after they received money pursuant to a settlement agreement.  The case is Allen v. The Riese Organization, decided May 16, 2013. Under New York law, there is no independent obligation (i.e., absent a contractual obligation) to…

Read More Court Dismisses Complaint Because Claims Already Released And Settlement Money Paid
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In Malinowski v. Wall Street Source, Inc., 09 Civ. 9592 (PAE) (SDNY Dec. 2, 2011), NYLJ 1202534751470, the Southern District of New York held that evidence of plaintiff’s post-termination wages was inadmissible in light of the severance clause in plaintiff’s contract (which provided that plaintiff could only be fired for cause). Plaintiff sought unpaid wages,…

Read More Severance Clause Nullifies Mitigation Duty
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In Ridinger v. Dow Jones & Co. Inc., 651 F.3d 309 (2d Cir. 2011), the Second Circuit affirmed an SDNY decision dismissing plaintiff’s complaint alleging age discrimination under the ADEA.  Defendant argued that plaintiff’s claims were barred by a Separation Agreement under which plaintiff agreed to waive all claims (including those under the ADEA) against defendant.  Plaintiff argued…

Read More Second Circuit Holds That Separation Agreement Complied With The Older Workers Benefit Protection Act (OWBPA), Justifying Dismissal of ADEA Complaint
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