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JamesWind

Title and salary reduction in advance of termination? - AZ

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A friend (truly) negotiated a 4 month severance package prior to accepting a job at a new company (just over 3 years ago). This was noted in her offer letter but we live in an "employement at will" state so there's no employment contract. About a five weeks ago she was demoted and her pay was reduced significantly (35%). Despite that, she decided to make the best of it and stay at the job. A week ago her employment was terminated without cause.

 

It seems to me that she was demoted in advance of termination so that the company could reduce the amount of severance they'd committed to paying. Are there any AZ laws governing this type of behavior? Does she have any legal recourse? She's hesitant to reach out to an attorney without knowing whether she's just wasting her time. 

 

 

 

 

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Since there's no law requiring an employer to provide a severance package, there's really nothing she can do.  It's a little odd to take a job without a contract but with a severance package....Since she wasn't terminated for cause, she can apply for unemployment.

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I agree with legalwriter. A severance package is usually part of an employment contract.

BTW, just because you live in an at will employment state (which includes 49 of the states), does not mean you cannot or do not have an employment contract. All union jobs for example, have an employment contract.

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We'd need more detail to answer your question fully.

 

What were the terms of the severance package?  What exactly did the offer letter say?  What is the relationship between the pay cut and the severance payment?

 

 

 

She's hesitant to reach out to an attorney without knowing whether she's just wasting her time. 

 

This doesn't make a lot of sense.  See https://en.wikipedia.org/wiki/Schr%C3%B6dinger%27s_cat

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Had the offer letter, which can function as a written contract/evidence of one indicated that a demotion wouldn't affect severance calculation, then she might have a point to pursue (though unless she has plenty of dough, wouldn't likely be cost effective because I surmise there wasn't anything about attorney fees in the mix/letter or other).

Hard to argue bad faith if there was even a facial basis to demote. They likely wouldn't make a suit easy, but perhaps would cave after cost-benefit analysis if she paid a lawyer to send carefully written letter. But with such a move comes danger they won't pay severance, and sit back and let her sue for it.

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Hi JamesWind,

 

Welcome to the community and thanks for your question! Sorry to hear about your friend’s problems with her employer. The best person to advise your friend of the likelihood of success of any claim she may have against her employer is an experienced employment attorney. Many attorneys offer free consultations, so your friend can get an idea of the likely success of her case before spending the money to retain counsel. She can use our directory to find an employment attorney in Arizona.

 

Best of luck to your friend and keep us posted!

The FindLaw.com Team

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