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Failure to Offer Comparable Severance Package Could Be Discriminatory Under Title VII

The U.S. Court of Appeals for the Fourth Circuit reversed and remanded a district court’s dismissal of a claim by a former employee that she was not offered the same severance benefits as other similarly situated male counterparts when they were terminated from employment. In this case, the employee was offered three months of continued pay and health benefits when her employment as the county’s human resources director was terminated. The employee claimed that males in similar positions were customarily offered six months of pay and benefits, or were transferred to positions with less responsibility while continuing their pay and benefits. The district court dismissed her claim, finding that there was no factual basis for an “adverse employment action” because there was no contractual right to the severance package and she was a former employee at the time the severance package was offered. The Court of Appeals reversed the district court’s dismissal, stating that the discriminatory denial of a non-contractual employment benefit, such as severance benefits that the employer was not contractually obligated to provide, could constitute an adverse employment action, and that Title VII applies to current and former employees. Gerner v. County of Chesterfield, VA., No. 11-1218 (4th Cir. March 16, 2012).

The lawyers of our Employee Benefits and Executive Compensation Practice Group are readily able to assist companies on a nationwide basis with implementing sophisticated benefit plans and providing answers to their most challenging compensation issues. Additionally, our lawyers are well aware of the daily employee benefits challenges facing companies of all sizes and are capable of helping in-house lawyers and human resources personnel with the day-to-day advice and guidance necessary to properly administer employee benefits plans.

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May 2012
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