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March 19, 2009

1 Min Read
Nortel: You May Have Pension, But No Severance

Imagine you’ve been laid off from Nortel Networks Corp. (NT) without a severance package.

That’s what happened to hundreds of now-former employees in the United States when the telecom equipment maker went bankrupt in January. Now Nortel is saying it will give some financial help to those workers, many of whom are struggling to pay their mortgages and other bills.

Here’s the deal: Nortel will make good on laid-off workers’ pension plans and retiree medical benefits, but only if they agree to forgo the severance they’re owed. For many people, severance amounts to at least a year’s pay. Okay, so collecting a pension means an ongoing stipend. The trouble is, the pension gets smaller without the amount of severance pay included.

Some former employees are fighting back. They’re rounding up legal support to mount a case against Nortel in hopes of getting their severance pay.

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