As Christmas 2018 approached, Toys ‘R Us had already slid into bankruptcy. It was hoped that a strong holiday season might keep it afloat. But sales suffered.
In January and February, Toy ‘R Us told our clients to stay on and sell through the inventory. It promised to pay them their severance if they did. Many stayed. Toys ‘R decided that all the stores had to close. About 30,000 employees, some of whom had been accruing severance for 20 years or more, kept working under the promise of severance to wind down and close the stores. Meanwhile, however, Toys ‘R Us had cancelled its severance plan. As stores closed, Toys ‘R Us told our clients they would not be paid severance after all. That gave rise to a grass roots movement. Employees protested the lost jobs and severance. They questioned why Toys ‘R Us had to close. They learned the debt placed on the company by its prior owners and lenders was crushing. The employees’ protests became national news. It garnered them a payment of $20 million from the ex-owners, KKR and Bain Capital. But that was only a fraction of the unpaid severance.
Jack and René got the professionals in the Toys ‘R Us bankruptcy to recognize the severance claims and negotiations proceeded to confirm a highly contentious Chapter 11 plan. Jack and René wrested $2 million for the severance based on a $10 million agreed upon claim, still a small fraction of the maximum, but a positive result under the circumstances.
This struggle cast a harsh public spotlight on inadequacy of severance protections in the law. To plug that hole, Jack and René with the Toys ‘R Us employees went to the legislature and Governor in New Jersey and in 2020 got a law enacted to help secure severance for future employees – whether it is promised or not. Raisner Roupinian looks forward to seeing employers comply with the new law, beginning July 2020.
See press coverage here:
https://www.legalreader.com/former-toys-r-us-employees-win-2m-settlement-over-severance-pay/
https://www.thenation.com/article/archive/new-jersey-severance-pay-layoffs/