Severance Pay Following Transfer of Control

Severance Pay Following Transfer of Control (M.G.L.c. 149, ss. 183-184)

An employee of a control transferor whose employment is terminated within twenty-four calendar months after the transfer of control of his employer is entitled to a one time lump sum payment from the control transferee equal to twice his weekly compensation multiplied by each completed year of service. Such severance pay must be made within one regular pay period after the employee's last day of work. (M.G.L.c. 149, s. 183(b))
Any employee of a control transferor whose employment is terminated within the shorter of the following periods prior to a control transfer: (1) twelve calendar months; or (2) the period of time between which the control transferee obtained a five percent interest in the voting securities of the control transferor and consummated a control transfer by obtaining a fifty percent or greater interest pursuant to a transfer of control, is entitled to a one time lump sum payment from the control transferee equal to twice his weekly compensation multiplied by each completed year of service. Such severance pay to eligible employees must be made within four regular pay periods after such transfer of control. (M.G.L.c. 149, s. 183(c))

There is no liability for the one time payment to an otherwise eligible employee if:

The employee is covered by an express contract providing for such payment in the event of termination of employment in excess of that provided by this statute;
The employee has been employed by the control transferor for less than three years; or
The transfer of control is between an individual and his or her spouse, sibling, sibling's spouse, lineal descendants or their spouses. (M.G.L.c. 149, s. 183(d))

Upon assuming control, the control transferee is responsible for providing written notice to each employee of the control transferor and the collective bargaining representative, if any, of the rights of employees under this statute within thirty days of completion of a transfer of control. (M.G.L.c. 149, s. 183(e))

In the event any eligible employee is denied a lump-sum payment as a result of a violation of this statute, the employee shall have available the remedies provided under M.G.L.c. 148, ss. 148-150. (M.G.L.c. 149, s. 183(f))

Any employee of a control transferor whose employment is terminated within the shorter of either (1) twelve calendar months following a contested meeting date of such control transferor; or (2) the period between a contested meeting date of such control transferor and a transfer of control is entitled to a one time lump sum payment from the control transferor equal to twice his weekly compensation multiplied by each completed year of service. Such severance pay to eligible employees is in addition to any final wage payment and must be made within one regular pay period after the employee's last day of work. (M.G.L.c. 149, s. 184(b))

There is no liability for the one time payment to an otherwise eligible employee if:

The employee is covered by an express contract providing for such payment in the event of termination of employment in excess of that provided by this statute;
The employee has been employed by the control transferor for less than three years; or
The transfer of control is between an individual and his or her spouse, sibling, sibling's spouse, lineal descendants or their spouses. (M.G.L.c. 149, s. 184(c))

Any amounts paid to an employee pursuant to Ssection 184(b) must be credited against any amounts payable by a control transferee to such employee pursuant to Section 183. (M.G.L.c. 149, s. 184(d))

The control transferee is responsible for providing written notice to each employee of the control transferor and the collective bargaining representative, if any, of the rights of employees under this statute within ten business days of the occurence of a contested meeting. (M.G.L.c. 149, s. 184(e))

In the event any eligible employee is denied a lump-sum payment as a result of a violation of this statute, the employee shall have available the remedies provided under M.G.L.c. 148, ss. 148-150. (M.G.L.c. 149, s. 184(f))

Those remedies include filing an online complaint with the Massachusetts Attorney General pursuant to M.G.L.c. 149, s. 150 and receive from the Attorney General a "private right of action" letter, allowing an employee so aggrieved who prevails in court to be awarded treble damages, reasonable attorneys' fees and the cost of litigation. Such an action must be brought within three years of the violation, but that period is tolled from the date the employee files a complaint with the Attorney General until the date the Attorney General issues a letter authorizing a private right of action.