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Cardinal Health Lay Offs Should Seek Legal Review of Severance Package

An article in the Columbus Dispatch on May 8, 2013, announced that Cardinal Health would be laying off 170 employees, including 70 from its Dublin, Ohio headquarters.  The affected employees were provided notice on Monday, May 6, 2013, and given thirty (30) days' notice.  Cardinal Health spokeswoman Debbie Mitchell indicated they employees would receive a severance package based on years of employment and "will be given preference for any available positions that might be open." 

Any employees presented with severance or settlement agreements should have the proposed agreements reviewed by qualified labor and employment counsel.  Experienced employment attorneys will review the important considerations for employees executing agreements and can counsel employees as to necessary revisions of terms of the agreement.  In most instances, the agreements themselves will advise the employees to seek counsel to review the agreement with them.  This provision is a requirement for releases subject to the Older Workers Benefit Protection Act to ensure the employee understands the terms they are agreeing to that are contained in the agreement.

General considerations for anyone executing an agreement will include the release of their claims, allocation of severance for unemployment purposes, and the reasonableness of the package.  In some instances, employees may be unaware they are being asked to agree to non-compete provisions, non-disparagement provisions, or blanket confidentiality provisions.

Finally, employees should review whether the stated reason for any lay-off aligns with their selection for separation from the Company. In the Cardinal Health instance, the company identified the cuts partially result from Cardinal's loss of a $22-billion-a-year contract with Walgreen Co., and "ongoing efforts to serve the evolving health-care system as efficiently as possible."

An employment attorney should review any agreement included in a severance package before execution. Employees should always understand the implications of any agreement and the terms they will be held to in exchange for their severance package.

By: Justin A. Morocco

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