Is it worth paying to have an employment separation agreement checked?

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Quandry

Quandry

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Tennessee
After close to five years, I was suddenly told that my position had been eliminated because of the department's "change in direction" (no specifics) and I was escorted from the building. At the time I asked if this had anything to do with another employee who had told a series of ridiculous lies to my manager where she claimed that I had been repeatedly breaking the rules of a senior VP (her boss) over my own among other departments and upsetting him. After every time I was taken to task for these supposed violations, I insisted that they simply ask the Senior VP if he even had such absurd rules (such as a prohibition against slipping a document he needed under his door when he was out of his office), let alone that he told his assistant that he was angry with me for breaking them. The rules made him look like a petty fool, and he is not. And, why, I asked, is it that no one has ever heard of these supposed weird rules before she accused me of breaking them? And why am I the only person the Sr. VP is ticked off at?

In short, My boss's boss never asked that Sr. VP if he had actually had such rules and if he complained to his assistant that I hd repeatedly broken them (as if he wouldn't have gone to my boss or her boss directly if I had caused trouble instead of whining to an administrative assistant!). He was really in charge of other departments, but temporarily serving as our interim CIO, so for now my boss's boss reported to him... and she very much wanted to be our new CIO, and he was going to have some influence on that decision. So, if I went over her head to him, he'd have cleared my name but would have been ticked off at her for not telling him and also for believing that he would have such stupid rules and have acted like such a coward, and she'd have been furious with me. She would have made me suffer worse for that, especially when they hired someone else to be CIO. I was treated as if I were guilty of every accusation made against me, as if I had not just suddenly transformed into an unprofessional troublemaker, but also as if I had also become a liar for protesting my innocence each time. I had a very good relationship with my boss and great reviews until that point, an no one else, including the other managers in our department, believed my accuser, so I tried to get a position reporting to someone else, but there weren't any openings that fit. After many months of this Kafkaesque nightmare, things seemed to ease off a little, at least with my boss, and I was assigned a huge, important, and long-term project for which I was uniquely qualified in the company. I was doing a really good job at it, when soon after, all of a sudden, I was out the door. Since I was past reprisals at that point, I reported the incidents to HR, pointing out that their own anti-harassment policy prohibits one employee from doing that to another. I doubt anything will come of it.

To top it off, they didn't tell me that I had the right to elect an FSA COBRA, and since I wasn't aware there was such a thing (it wasn't one of the options they gave me), I came close to forfeiting the $700 of my savings in that account because I hadn't used it yet. Mind you, that was my money taken from my paychecks for six months. Guess who gets to keep FSA money that their ex-employees forfeit? Legally, they do. Luckily, I didn't believe that I had no choice but to forfeit my savings, so I I did a lot of research and found out that I was right. I told the COBRA manager about this and even gave her links to the law, but she acted as if she had never heard of it. She obviously didn't look because then she told me (this was all in email) that it was something optional and that their company "didn't do FSA COBRA". Polite throughout, I told her it wasn't an option for them, that it was mandated by federal law. Five hours after that last email, she finally sent me instructions on getting my savings back from them. Altogether it took me days to figure this out and to get them to finally relent. Obviously, they've never told any others in my same situation that their ex-employees had a right to not forfeit their savings to the company's coffers, and the COBRA selection form proves that (along with the emails). I got my savings, but I'd like to get the Department of Labor to investigate them so they can't take money from anyone else again.

What do I do? The severance is only three weeks of pay, but I'm suddenly out of work. I don't trust what I can't understand in the rest of the agreement, and if I sign it they will shut down their internal investigation and they'd sue me if I help the Dept. of Labor go after them for the COBRA issue... and I'm afraid I'll wind up losing what little they are offering me and more to attorney fees. If this is typical for a lot of companies and they usually get away with it, I don't see any sense in pursuing it. But if it isn't then, do to what they have done already, I guess I should have an attorney check the agreement.
 
The bottom line here is that you were employed at will and could be terminated for any reason or no reason as long as it didn't violate anti-discrimination laws.

The employer has no obligation to give you severance at all so getting three weeks is found money.

Paying an attorney to review it at $300 per hour isn't worth it because it won't change anything and is likely going to get the severance offer rescinded.

You have no leverage.

Take the severance and file for unemployment ASAP.

Report the COBRA thing to the DOL if you like. Won't help you, won't change their practices, might give you some satisfaction.

I spent 40 years in the corporate world and had a few similar experiences. They happen. Likely won't be the last time for you either. But you get over it and you move on, hopefully to something better.

Oh, one thing to remember: HR is not the employee's friend. HR works for the employer, answers to the employer, enforces the employer's policies no matter how stupid and unfair they are, and covers the employer's butt.

It always amused me that the TV show Person of Interest depicted HR as an evil cabal of corrupt cops and politicians.
 
I suspect that somewhere in your FSA documentation you were "told" what your rights were upon termination. I hear from people all the time "nobody ever told me that" and "that" is clearly spelled out in the handbook that they signed an acknowledgement that they read and understood.
Adjusterjack is completely correct that it doesn't appear that you were illegally terminated and three weeks severance pay sounds pretty generous to me. If there is language in the separation agreement that is really difficult to understand and interpret, it might make you feel better to get legal advice before signing.
 
Jack you know what I'm going to say, right? (headbang)

I'll be honest. Unless you have significant expenses coming up in future that you were counting on those pre-tax dollars to pay for, it doesn't make sense to COBRA your FSA, even though you have a right to. Any COBRA contributions will be by post tax dollars and that pretty much defeats the whole purpose of the FSA. Very few people actually choose the COBRA option even when they know about it, for that reason. FSA is not a savings account; you should never, ever put in more than you have a realistic expectation of using because that use-it-or-lose-it feature is IRS reg, not something that your employer put in to legally cheat you with. FSA's are different from HSA's - they don't roll over into next year and neither you nor the employer has a choice about the use-it-or-lose-it.

Now, if you have major dental work coming up October or are having surgery next month that you were planning on using the FSA for, then COBRA is your best option since it will keep the account open even though you won't get the tax savings. But truly, for most people COBRA and FSA's are an oxymoron.
 
adjusterjack said:
The bottom line here is that you were employed at will and could be terminated for any reason or no reason as long as it didn't violate anti-discrimination laws.

The employer has no obligation to give you severance at all so getting three weeks is found money.

Paying an attorney to review it at $300 per hour isn't worth it because it won't change anything and is likely going to get the severance offer rescinded.

You have no leverage.

Take the severance and file for unemployment ASAP.

Report the COBRA thing to the DOL if you like. Won't help you, won't change their practices, might give you some satisfaction.

I spent 40 years in the corporate world and had a few similar experiences. They happen. Likely won't be the last time for you either. But you get over it and you move on, hopefully to something better.

Oh, one thing to remember: HR is not the employee's friend. HR works for the employer, answers to the employer, enforces the employer's policies no matter how stupid and unfair they are, and covers the employer's butt.

It always amused me that the TV show Person of Interest depicted HR as an evil cabal of corrupt cops and politicians.
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Thanks, Adjusterjack. After the company's harassment policy presentation I stayed behind to ask the attorney they had deliver it to us if that series of lies was harassment according to their ("zero-tolerance") policy and he said it most certainly was. She has a long standing history of this, but people are afraid of saying anything because she's protected, so I reported her in the small hope that that might help the next person. I don't have high expectations of her actually having to answer for anything this time either, though, so I should just let it go.

I figured it wouldn't be worth having an attorney read the agreement to tell me what I wasn't seeing, thanks for confirming that. Someone from the DOL did call me back about my message. She warned me that she couldn't guarantee that anything would come of it, but was very interested in what the COBRA manager wrote in her email to me and also in my description of the documents they sent me regarding the close of my FSA and on what they said my COBRA rights were. She asked me to fax her copies. I've also found out that if I sign the company's separation agreement, that won't stop any government investigation of their COBRA manager's ignorance of the existence of the FSA COBRA and of her outright stating that they never offer anyone the right to elect it that may arise. Since the government considers such demands of silence to be invalid, I wouldn't have to pay back the severance money, either. The penalty for their not informing ex-employees of their full COBRA rights is $100 per day (that they don't) per beneficiary, or $200/day for accounts that also cover other family members. I forget what the penalty limit is per incident, but it's high enough to serve them right if they get punished.
 
txls said:
I suspect that somewhere in your FSA documentation you were "told" what your rights were upon termination. I hear from people all the time "nobody ever told me that" and "that" is clearly spelled out in the handbook that they signed an acknowledgement that they read and understood.
Adjusterjack is completely correct that it doesn't appear that you were illegally terminated and three weeks severance pay sounds pretty generous to me. If there is language in the separation agreement that is really difficult to understand and interpret, it might make you feel better to get legal advice before signing.
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Txls, in my case your suspicions are unfounded. I actually keep and file such documentation as you described and one of the first things I did was check it. There is no mention of the case of termination. If there had been, why would their COBRA manager have not known an FSA COBRA even existed? Why would she later state that she believed it was an optional benefit employers could offer to employees and that their company "didn't do FSA COBRA"? And, why would they have given up keeping my savings when I emphasized that they were breaking federal law?

I didn't say I was trying to prove that I was illegally terminated, I said that I was concerned that my signing the agreement would shut down the internal harassment investigation as I, the person who reported the problem, no longer had the right to complain.
 
cbg said:
Jack you know what I'm going to say, right? (headbang)

I'll be honest. Unless you have significant expenses coming up in future that you were counting on those pre-tax dollars to pay for, it doesn't make sense to COBRA your FSA, even though you have a right to. Any COBRA contributions will be by post tax dollars and that pretty much defeats the whole purpose of the FSA. Very few people actually choose the COBRA option even when they know about it, for that reason. FSA is not a savings account; you should never, ever put in more than you have a realistic expectation of using because that use-it-or-lose-it feature is IRS reg, not something that your employer put in to legally cheat you with. FSA's are different from HSA's - they don't roll over into next year and neither you nor the employer has a choice about the use-it-or-lose-it.

Now, if you have major dental work coming up October or are having surgery next month that you were planning on using the FSA for, then COBRA is your best option since it will keep the account open even though you won't get the tax savings. But truly, for most people COBRA and FSA's are an oxymoron.
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I have fully benefitted from having an FSA for years, and have never lost money into it even before the $500 rollover (yes, they do have one, you were mistaken about that) went into effect. Stating that I had saved money into that account for my medical expenses does not equate into a belief that the FSA is a savings account.

I based the limit of my contributions on upcoming medical expenses. I have already recovered over $350, and, even with the two contributions I will have made before I close the account, I will have recovered everything within two months. FSA COBRA gives me the chance to use it and not lose it.

I neither stated nor implied that I believed my ex-employer "put in" the use-it-or-lose-it rule into the FSA, let alone that they did in order to "legally cheat" me. (By the way, regarding the definition of an oxymoron: Flexible Spending Account /Consolidated Omnibus Budget Reconciliation Act is not an oxymoron as neither term contradicts the other in any way; that expression of yours, "legally cheat", on the other hand, is a perfect oxymoron.)

I didn't say the fact that my ex-employer gets to keep all the money that their employees contributed to their FSAs if they forfeit that money was illegal. They, however, have been breaking federal law by not having been informing qualified ex-employees, terminated or not, of the existence of an FSA COBRA and by not having included it on the COBRA elections form of each of those people. That is, it's illegal for them, by implication and omission, to have not let those FSA account holders know that they did not have to forfeit their money to the company. See, I wasn't describing "cheating" at all. I was describing theft.

Your opinion (or anyone's) of the value of FSAs has no bearing on that.
 
Actually, I'm not mistaken.

An HSA, which serves a similar purpose to an FSA, rolls over in its entirety from year to year. Anything you don't use, you keep.

The IRS, only a year or two ago, began allowing a employer IF THEY CHOOSE TO, to allow up to $500 to be rolled over, but ONLY if they do not allow the 2 1/2 month grace period that has been permitted much longer. Not all employers allow the rollover, and it's limited at best. While it may have been an overstatement not to acknowledge the possibility, it's by no means a sure thing that any given FSA is going to allow a rollover.

No one said there was no violation. You are free to report it if you wish to and no one, particularly not me, said otherwise. But if it was an overstatement on my part to say an FSA doesn't allow rollovers without acknowledging the limited exception, it is an overstatement on yours to call the omission of a COBRA notice, theft.
 
Quandry said:
I have fully benefitted from having an FSA for years, and have never lost money into it even before the $500 rollover (yes, they do have one, you were mistaken about that) went into effect. Stating that I had saved money into that account for my medical expenses does not equate into a belief that the FSA is a savings account.

I based the limit of my contributions on upcoming medical expenses. I have already recovered over $350, and, even with the two contributions I will have made before I close the account, I will have recovered everything within two months. FSA COBRA gives me the chance to use it and not lose it.

I neither stated nor implied that I believed my ex-employer "put in" the use-it-or-lose-it rule into the FSA, let alone that they did in order to "legally cheat" me. (By the way, regarding the definition of an oxymoron: Flexible Spending Account /Consolidated Omnibus Budget Reconciliation Act is not an oxymoron as neither term contradicts the other in any way; that expression of yours, "legally cheat", on the other hand, is a perfect oxymoron.)

I didn't say the fact that my ex-employer gets to keep all the money that their employees contributed to their FSAs if they forfeit that money was illegal. They, however, have been breaking federal law by not having been informing qualified ex-employees, terminated or not, of the existence of an FSA COBRA and by not having included it on the COBRA elections form of each of those people. That is, it's illegal for them, by implication and omission, to have not let those FSA account holders know that they did not have to forfeit their money to the company. See, I wasn't describing "cheating" at all. I was describing theft.

Your opinion (or anyone's) of the value of FSAs has no bearing on that.
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cbg,

While you may consider my earlier point-by point refutal to have been harsh, I hope you can see how your reply came across.

I understand from your comment to another poster that the FSA is a pet peeve of yours. But, I did not appreciate your using my post to climb on that particularly favored soapbox, especially since you made unfounded assumptions about me to do so. Your main premise, a false one, was that I had no idea what I was doing when I set up my FSA, and you built on that while castigating me for being foolish, even making out that I was blaming my ex-employer for the FSA use-it-or-lose-it rule, which is ridiculous.

As I had just recounted an upsetting work experience where I had been blamed for ridiculous things that never even happened, at first I suspected you of being a troll. Then I decided your "FSA" hot button first kept you from reading most of what I had actually related about my FSA and then it got you to fill those gaps with conjecture. That would be the "hot" part of a hot button–and I'm sure we all know what that's like.

While you are entitled to your opinion of FSA's and FSA COBRA's, it was not the least bit helpful for you to address me as if I were a fool to consider using them. I already had the FSA. I already converted it to an FSA COBRA. I related what I did to illustrate what kind of an employer I was dealing with as I was seeking advice on whether or not to sign that particular agreement of separation without running it past an attorney.
 
cbg said:
Actually, I'm not mistaken.

An HSA, which serves a similar purpose to an FSA, rolls over in its entirety from year to year. Anything you don't use, you keep.

The IRS, only a year or two ago, began allowing a employer IF THEY CHOOSE TO, to allow up to $500 to be rolled over, but ONLY if they do not allow the 2 1/2 month grace period that has been permitted much longer. Not all employers allow the rollover, and it's limited at best. While it may have been an overstatement not to acknowledge the possibility, it's by no means a sure thing that any given FSA is going to allow a rollover.

No one said there was no violation. You are free to report it if you wish to and no one, particularly not me, said otherwise. But if it was an overstatement on my part to say an FSA doesn't allow rollovers without acknowledging the limited exception, it is an overstatement on yours to call the omission of a COBRA notice, theft.
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II have no idea why you brought up HSAs to begin with, but let's look at what you actually wrote that I said was mistaken: "FSA's are different from HSA's - they don't roll over into next year". That is an invalid claim. Muddying the waters with how many years ago the IRS started allowing carryovers (three, actually) as an FSA option or how much they let you carryover (in my case, it equals more than one third) doesn't change that.

"Not all employers allow the rollover, and it's limited at best." Even if only one in the entire USA did, that would invalidate your claim. And, the majority of employers who offer FSAs use one with a carryover. The number doubled between 2013 and 2015.

"No one said there was no violation." I was replying to your statement of "that use-it-or-lose-it feature is IRS reg, not something that your employer put in to legally cheat you with". Again, I said nothing of the sort, I said they were breaking a federal law ever time they failed to inform departing qualified employees of their right to the money they put in their FSA. That has caused countless people who may otherwise have elected to keep their hard earned money to believe they had no choice but to forfeit all of it to the company. That, my friend, is theft.

"it is an overstatement on yours to call the omission of a COBRA notice, theft." Again, please read what I actually wrote. I never said that they omitted my COBRA notice. It consisted of multiple pages, but did not mention FSA COBRAs. They also excluded that choice from the election form. And, until 5 PM of the second day, they repeatedly insisted, despite the proof of the law I sent, that there was nothing that allowed me the right to not lose my money to them. The DoL attorneys may have a fancier name for what the company has been doing, but, at the very least, it is theft.
 
You understand incorrectly. I have no particular beef with FSA's - I have one myself. I administer them for a living. But I can see that it's very important to you to not only have the last word, but prove that you know FSA's better than I do. So have yourself a good day.
 
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