Severance Pay Dispute Lawsuit

To bring a valid claim for unpaid severance pay in New York, an employee must show that the employer promised severance through a written contract, offer letter, collective bargaining agreement, or established company policy. New York law does not impose minimum employment duration, weekly hour requirements, or statutory payment deadlines for severance unless those terms are set by agreement. The key factor is proving that severance was explicitly or implicitly promised and that the employer failed to honor that obligation. This contractual foundation is what establishes legal standing for a severance pay dispute.

The civil lawsuit follows these general steps:

• File a complaint in the appropriate civil court (where the employer operates or employee resides).
• The court will serve the employer, who must then file a response or face a default judgment.
• If contested, both sides submit pleadings and attend hearings.
• The judge reviews employment records to determine if severance was owed and unpaid.
• If the employee wins, an enforceable judgment is issued, which may be enforced through wage garnishment or asset seizure.

This legal route ensures employees have an avenue to claim what they are legally owed. Following the prescribed civil procedure is key to securing a successful recovery.

Start by collecting the following:

These materials establish your work history and prove what was promised or agreed upon. The clarity and completeness of these records will impact the court's perception of your claim.

Before formally filing a lawsuit, send a formal letter to the employer demanding payment. This demand letter should:

• Clearly state the exact amount of money owed.
• Cite your employment dates and the reason for separation.
• Include a firm deadline for payment (typically 7 to 14 days).
• Mention that formal legal action will follow if the demand is not satisfied.

Such a formal notice may encourage informal resolution without litigation. A well-crafted demand letter demonstrates serious intent to pursue the full claim.

Whether severance is legally required is a crucial question. Some agreements are purely contractual, stemming from a signed agreement. Others may be customary or part of a long-standing employment policy. Courts review all relevant documents, including contracts and company handbooks, to find an explicit or implied promise. Proving a clear entitlement is often the most essential hurdle in these disputes.

How severance is calculated is the second major issue. The correct amount typically depends on the employee’s average wages, the duration of employment, and the reason for termination. Any discrepancies in these figures may become major points of contention during court proceedings. It is essential to verify your own calculations against what the employer claims, as a precise figure strengthens your demand.

If your severance entitlement arises from a written contract, New York’s six-year statute of limitations generally applies. However, claims grounded in certain wage-related statutes may have shorter limitation periods, often only three years. Miscalculating the deadline can lead to the permanent forfeiture of your right to sue. It is always best practice to act promptly—well within the shortest applicable period—after your termination date.

Before filing suit, consider the following:

• Verify your eligibility under your job’s specific terms or the applicable company policy.
• Keep meticulous records of all communication with the employer regarding the payment.
• Seek legal consultation early, especially if the amount is significant. An experienced attorney can accurately assess and guide you.
• Consider settlement options actively during or before formal litigation, as this often provides a quicker, less expensive resolution.

By taking swift and organized action, workers can effectively hold employers accountable under New York employment law for unpaid severance benefits. Do not delay in gathering your documentation and seeking the necessary legal advice.