March 22, 2001, 10:48 AM — The high-tech downturn didn't just burst the dot-com bubble -- it also revealed a dark side of the New Economy. Technology workers across the country are complaining that employers who once pampered them with espresso machines are not only firing them unceremoniously, but also doing it without notice, severance pay, or, in some cases, back wages. The resulting losses are not purely financial. "Workers put in a lot of sweat equity, and now find they've got nothing," said San Francisco attorney Michael Loeb, an employment law specialist at McCutchen, Doyle, Brown, & Enersen. "There's a sense of mismanagement."
Unfortunately, even workers who are told to clear out without notice -- and without two weeks' extra pay in their pockets -- may not have a legal claim against their former employer.
The first hard lesson tech workers must learn is that employers have the upper hand at severance time. The real shock for most workers, according to Loeb, is that they have no legal right to severance pay or advance notice of termination. And if the company that fires you goes out of business, COBRA (Consolidated Omnibus Budget Reconciliation Act) regulations that guarantee access to health care coverage don't apply, he said.
Most tech workers are classified as "at will" employees, which essentially means they can get the ax for almost any reason, no matter how capricious, even if they've been model employees. The exceptions are terminations based on age, gender, or race. Additional protection may be afforded to members of a technology union -- a rarity in the high-tech world -- that has negotiated a protective bargaining agreement.
The WARN (Worker Adjustment and Retraining Notification) Act is available to those involved in a mass layoff, which is defined as 50 or more people being let go at a company with fewer than 100 employees. WARN guarantees at least 60 days' advance notice or the equivalent in severance pay.
Even if your company has a severance plan, not every termination is a clear-cut case. In late March, the New York Times reported that a group of Computer Associates workers, who were officially terminated because of "poor performance," had charged that they were let go because of the company's weakening financial condition -- essentially, a mass layoff that, according to the article, was disguised to circumvent severance payments. At the time of this writing, the disputes were unsettled.