How to Win the Breach of a Severance Agreement Case in New York June 21, 2010

It seems to me that many people are under the impression that your hands are completely tied, and you have no immediate recourse to the New York State courts if your former employer breaches your severance agreement. While in many cases, e.g., where the severance plan is governed by ERISA (in which case a common law breach of contract is automatically barred (“pre-empted”), these cases may prove quite difficult, there are some cases – and they are not insignificant – where a discharged employee can still recover damages for unpaid severance benefits.

So what does a plaintiff have to prove in order to win one of those cases?

Although the list is short, as a practical matter marshaling this proof is not simple:

The plaintiff must prove “that the employer made a regular practice of making severance payments and that the plaintiff detrimentally relied on the severance policy, Skarren v Household Finance Corp., 296 AD2d 488, 745 NYS2d 556; Hirschfeld v Institutional Investor, Inc., 260 AD2d 171, 688 NYS2d 31; see Gallagher v Ashland Oil, Inc., 183 AD2d 1033, 583 NYS2d 624; see also Spencer v Christ Church Day Care Center, Inc., 280 AD2d 817, 720 NYS2d 633 (in order to recover for accumulated vacation time, at will employee must establish regular practice of paying employees unused vacation and reliance upon that practice in accepting or continuing position).”

Jonathan Cooper is a New York Business Litigation and New York Commercial Litigation Lawyer with a focus on New York breach of contract and New York business fraud claims before the Nassau, Queens, Brooklyn, Bronx, Westchester and Suffolk County courts of New York State. For more information, feel free to contact his Long Island office at 516-791-5700.

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