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August 14, 2007
Twenty workers were called into a conference room at 9:45 a.m. at Raydon Corp. in Daytona Beach recently. They had until noon to clear out their desks and leave the building. Guards stood by each door.
The same scene played out in other conference rooms elsewhere in the building.
In all, 95 would lose their jobs.
Some cried, some screamed at their bosses, some stomped out of the conference room and slammed doors.
"I didn't want to give them the satisfaction," said one employee. "So, I just left quietly."
The employees were offered severance pay, but there was a condition. They had to waive their right to sue under the Workers Adjustment and Retraining Notification Act, known as WARN, which requires many companies to give workers 60 days notice before they are laid off.
The Raydon employees also were required to give up their rights under the Age Discrimination in Employment Act, the Civil Rights Act, Florida's Wage Discrimination and Equal Pay laws and 12 other state and federal laws. The employees had to agree not to talk about the agreement.
"We were stuck. It was the only way to get the money," said Greg Goebel, who was laid off after 14 years.
And, it was perfectly legal, employment lawyers said.
"Lots of companies are getting employees to sign severance agreements waiving their rights against the company," said Orlando lawyer Jim Brown.
"The employee is in a tough position," he said. "What the company is buying is peace of mind. The bottom line is: Take the money and sign it, waiving your rights, or don't take the money."
Raydon spokeswoman Toni Henry said the company's severance agreement was standard. "In exchange for a release, which contained language that is customary for such a situation, Raydon implemented a severance package to all affected employees even though Raydon was not required to do so."
Raydon is just one of several local employers, including Hawaiian Tropic and First Data Corp., laying off employees recently.
The WARN Act requires companies to give employees up to 60 days pay when the employer fails to provide proper notice. But the law is so full of loopholes that employers repeatedly skirt it with little or no penalty, employment lawyers say.
The law fails to give government the authority to enforce the law. Workers must sue to recover their pay.
In general, companies are covered by the WARN Act if they have 100 or more full-time workers at one location and 50 or more employees lose their jobs in a plant closing. Employers also have to provide notice if 500 or more lose their jobs or if between 50 and 500 are laid off and they represent one-third of the work force.
When Hawaiian Tropic laid off 80 workers from its Ormond Beach plant and 30 employees from its customer service center in Kentucky in June, it didn't file a WARN notice with the state. Whether it should have may depend on how many other employees it transferred to other locations and if the number of employees represented one-third of its work force.
Laura Kiernan, a spokeswoman for Playtex, which now owns Hawaiian Tropic, said the company would not comment on why it didn't file a WARN notice or whether employees signed severance agreements waiving any rights. Kiernan could not say how many were given offers to stay or transfer.
First Data Corp. announced June 21 it would close its local call center by spring 2008, gradually laying off 400 employees. After 70 employees were dismissed in March, several said they were given severance pay after signing agreements not to discuss their layoffs or "besmirch the company's name."
Company spokeswoman Nancy Etheredge said the agreement was standard. "While I cannot disclose the contents of these agreements, I can tell you that the agreements contain terms that are commonly used by companies around the country," she said.
The company has not filed a WARN Act notice, but Etheredge said the company plans to file one before the plant closing.
David Glasser, a Daytona Beach employment lawyer, said workers told they are being laid off should contact a lawyer before signing anything.
By laying off 95 of its 295 employees, Raydon was three employees short of reaching the one-third limit.
"They knew exactly what they were doing," Goebel said.
Henry said the WARN Act was not applicable because "the threshold number of affected employees" was not met. She said Raydon provided outplacement services to all affected employees.
Raydon employees were paid a week of severance for each year they had worked, up to six weeks' pay.
"I worked for 14 years, but got six weeks of pay," Goebel said.
The Daytona Beach News-Journal talked to several Raydon employees, but none would give their names except Goebel.
"Humbling, humiliating, very hurtful," was his reaction.
"These guys were my friends, my buds, pals," Goebel said of Raydon's owners. "That is lost forever. That trust is all gone."
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