Most companies seek to maximize their profits by keeping their expenses down. Unfortunately, their efforts to cut costs sometimes come at the expense of employees who have worked hard for them. If you believe your employer fired you to avoid paying the retirement benefits you deserved, a wrongful termination lawyer in Jackson County, Missouri can help you fight for your rights.

Why Are Some Employees Fired Before Vesting?

Retirement plans are extremely costly for employers. With the recent increase in life expectancy, employees are now receiving benefits decades after they have left their companies. Vesting occurs when an employee becomes eligible for retirement benefits, whether or not he or she chooses to retire immediately. Your contract with your employer should state how many years you must work for the company before you vest.

Unfortunately, some employers are motivated to terminate their employees to prevent them from vesting. This kind of termination has been known to occur months, weeks, and even days before the employee becomes eligible to collect retirement benefits. Almost all employers who engage in this practice can come up with a false reason for the termination. For example, they might say the employee was late or that their position was no longer needed.

What Happens When an Employee Is Terminated Before Vesting?

The effect of this practice is that the company can save millions of dollars, depending on how many employees it terminates early and how many years each one would have spent in retirement. All of the savings are a direct cost to the employee, who is left with no retirement benefits after contributing years of work to grow the company’s worth.

From a planning perspective, the practice of terminating an employee right before he or she vests is especially egregious. How can a person accurately plan for his or her post-retirement living expenses while under the false impression that he or she will have substantial benefits?

The Impact of an Employer’s Unkept Promises

Most people think hard about the compensation package they are being offered before taking on a new job. In addition to the salary or hourly wage, people who take a long-term view of their financial health understand that a position that offers great benefits and an average salary can sometimes be more valuable than a job offering a great salary and sub-par benefits.

Employers use benefit packages as a recruiting tool to attract qualified candidates. When an employer takes years of work from the employee only to fire him or her before he or she vests, the promise of providing benefits is broken. At that point, after coming to the end of his or her working years, the employee cannot start over with a different company or change the decision he or she made to accept the position over other offers years ago.

What Kinds of Benefits Are Often Available Upon Vesting?

The benefits you are eligible to receive upon vesting are defined in the terms of your contract with your company. Often, retired employees collect monthly pension payments and other benefits.

Pension Plans

A pension is a monthly payment that a company provides as a supplement to social security. If the company offers a defined benefit pension plan, the employee will receive a set monthly payment for the rest of his or her life after retiring. If the employee is on a defined contribution pension plan, he or she will draw from a pool of money that the company has built throughout his or her working years.

Other Post-Employment Benefits (OPEB)

Other post-employment benefits are any non-pension benefits that the company is contractually obligated to pay a retired employee. As a former employee of a company that offers other post-employment benefits, you might receive:

  • Deferred compensation
  • Life insurance
  • Health insurance

What Are Your Rights?

The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that protects an employee’s right to collect his or her benefits. Additionally, ERISA sets minimum standards for the benefit packages companies in the private sector can offer their employees. If your company terminated you to prevent you from vesting, they violated your rights under ERISA and can be held accountable for reinstating your access to receiving the benefits they promised.

The Rules Regarding Benefits and Termination

According to ERISA, an employer retains the right to terminate an employee for a valid reason, even when the employee is close to vesting. However, the employer is not allowed to terminate the employee just to deny him or her retirement benefits. If you were denied benefits because you were fired or laid off and you believe your employer had no other legitimate motive, you have the right to sue your company for violating ERISA.

What Is the Timeframe for ERISA Violations?

Many of the provisions in ERISA apply for the duration of your employment. The majority of individuals who have successfully sued their company for a pre-vesting termination were either fired or laid off within six months of the date on which they would have vested.

How Can You Show That Your Employer Had No Legitimate Reason to Fire You?

Bringing a case against your employer requires evidence. In the case of an ERISA violation, circumstantial evidence is allowed. Unlike direct evidence, which can prove your argument directly, circumstantial evidence illustrates the high likelihood that a given event occurred. Therefore, your evidence should point to the strong likelihood that your employer fired you in order to avoid providing you with retirement benefits.

The specific evidence you present will depend on the circumstances under which you were terminated. For example, your employer might claim that your position was temporary. You might be able to counter their statement by showing that the company hired another individual to replace you immediately after you were asked to leave. Your lawyer can perform a thorough investigation into your contact terms, your employer’s policies, and how your termination was handled.

What If You Were Fired for Exercising Benefits You Had Access to Before Vesting?

Firing an employee to prevent them from vesting is not the only ERISA violation. Sometimes, employees are terminated because they have health conditions that require expensive medical coverage. Other times, women are fired for taking time off for pregnancy-related issues. Similarly, some employers have been known to fire employees for taking medical leave, either to care for themselves or a sick relative.

In all of the above examples, the employees who were terminated were exercising their legal rights under employment law. Firing an employee for using his or her benefits in a legitimate way is an example of employer retaliation. Sometimes, a single case can be brought against an employer who was motivated to terminate an employee as a means of denying retirement benefits and retaliating against the employee’s use of other benefits while still with the company.

How to Find a Wrongful Termination Lawyer in Jackson County, Missouri

Wrongful termination, whether intended to cut costs on benefits, retaliate against a whistleblower, or perpetuate discriminatory policies, is a harmful practice that can compromise a person’s future. You deserve to feel financially secure throughout your retirement, especially if your employer was under a contractual obligation to provide you with benefits. To review your case with a wrongful termination lawyer in Jackson County, Missouri, contact Holman Schiavone, LLC.