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Access over workers' compensation decisions, including En Banc, Significant Panel Decisions, and writ-denied cases.

Case No. MISSING
Regular Panel Decision

In Re Yarn Liquidation, Inc.

This memorandum addresses the priority of severance pay claims filed by fourteen former employees of SCT Yarns, Inc., a debtor in a Chapter 11 liquidation case. The court examines whether these claims qualify for third priority under 11 U.S.C. § 507(a)(3) for compensation earned within 90 days pre-petition, or first priority as administrative expenses under 11 U.S.C. § 507(a)(1) for services rendered post-petition. Adopting the majority rule, the court determines that severance pay is an administrative expense only to the extent earned by service during the bankruptcy case and a third priority claim only if earned within the 90-day pre-petition period. The court calculates the amounts entitled to first priority as administrative expenses for eleven employees who continued service post-petition and acknowledges that the pre-petition severance pay for all fourteen employees may qualify for third priority, subject to a $4,000 limit.

Bankruptcy LawChapter 11 LiquidationSeverance PayPriority ClaimsAdministrative ExpensesEmployee CompensationBankruptcy Code § 507Pre-petition ClaimsPost-petition ClaimsCreditor Priority
References
14
Case No. MISSING
Regular Panel Decision

Kosakow v. New Rochelle Radiology Associates, P.C.

Nancy Kosakow sued her former employer, New Rochelle Radiology Associates, alleging FMLA violations and wrongful denial of severance pay under ERISA. The court previously found FMLA claims collaterally estopped but remanded the ERISA claim to the Plan Administrator for a determination on severance eligibility. The Administrator denied severance, finding Kosakow not "terminated" and, even if so, not entitled to severance. This court reversed the "not terminated" finding, stating Kosakow was terminated due to a reduction in force. However, the court affirmed the Administrator's denial of severance, concluding that the "where applicable" clause in the Plan gave the Administrator broad discretion and that Kosakow's circumstances did not warrant severance. The court found that the denial was not unreasonable, even when considering a severance payment made to another full-time employee under different circumstances.

ERISASeverance PayFMLATerminationSummary JudgmentDe Novo ReviewPlan Administrator DiscretionEmployee BenefitsReduction in ForcePolicy Manual
References
8
Case No. MISSING
Regular Panel Decision
Apr 15, 1996

Eymer v. Ground Round, Inc.

Plaintiffs Jeffrey Eymer and Patrick Lappin sued The Ground Round, Inc. and its Severance Pay Plan, asserting claims under ERISA for denied severance pay, breach of contract for unpaid vacation days, and age discrimination for Eymer. Defendants moved for partial summary judgment on multiple claims. The court granted summary judgment for the defendants on Claims 3 and 8 but denied it for the remaining ERISA severance pay, breach of contract for vacation pay, and age discrimination claims. The court found material issues of fact existed regarding the arbitrary and capricious nature of the severance pay denial, disputes over vacation pay policy application, and a potential discriminatory animus concerning age, warranting further proceedings.

ERISAAge DiscriminationBreach of ContractSeverance PayVacation PaySummary Judgment MotionConflict of Interest PolicyEmployment LawEmployee BenefitsArbitrary and Capricious Standard
References
17
Case No. E2003-02735-SC-R11-CV
Regular Panel Decision
Nov 29, 2005

Eric Teter v. Republic Parking System, Inc.

This case concerns an employment contract dispute over severance pay following an employee's termination. Eric Teter, the employee, was involuntarily terminated by Republic Parking System, Inc. (RPS) after he rejected a new contract. RPS later ceased severance payments, arguing that after-acquired evidence of Teter's gross misconduct (viewing pornography during work hours) absolved them of liability. The Supreme Court of Tennessee overturned lower court rulings, holding that employers using after-acquired evidence in breach of contract actions only need to demonstrate employee misconduct by a preponderance of the evidence, not clear and convincing evidence. The court found a genuine issue of material fact regarding whether RPS would have fired Teter for the misconduct and thus remanded the case for trial, while affirming that Teter's termination was involuntary and the severance pay provisions were valid.

Employment ContractSeverance PayBreach of ContractAfter-Acquired EvidenceEmployee MisconductGross MisconductBurden of ProofPreponderance of EvidenceSummary JudgmentRemand
References
35
Case No. 16,680; 78-CI-18460
Regular Panel Decision

City of San Antonio v. Aguilar

This case addresses an appeal concerning a municipal labor contract dispute, where Emergency Medical Technicians (EMTs) of the San Antonio Fire Department sought overtime back pay. The central legal question involved the applicability and interpretation of the State Civil Service Act, specifically regarding the standard work week for fire department employees whose duties do not include firefighting. The appellate court affirmed the trial court's judgment, which had awarded overtime compensation to the EMTs for a period from November 1974 to July 1977. The decision heavily relied on the doctrine of stare decisis, citing the precedent set by the companion case of Kierstead v. City of San Antonio. The court dismissed the City's arguments regarding the doctrine of ejusdem generis and the method of overtime calculation, affirming that these issues were consistent with prior judicial interpretations.

Municipal EmploymentOvertime CompensationPublic Safety PersonnelStatutory InterpretationPreclusion DoctrinesStare DecisisRes JudicataCollateral EstoppelCollective Bargaining AgreementsCivil Service Law
References
18
Case No. MISSING
Regular Panel Decision
Apr 12, 1989

In Re Microwave Products of America, Inc.

Joseph Scallon, former president of Microwave Products of America (MPA), sought payment for post-petition salary and expenses as an administrative claim after MPA filed for bankruptcy. He claimed extensive hours and travel costs for his services as president and CEO, along with two weeks of severance pay. Presiding Judge Bernice Bouie Donald meticulously scrutinized Scallon's application due to his fiduciary role. The court allowed a salary claim of $3,000 for one week of necessary services rendered to preserve the estate. However, Scallon's $6,000 severance pay claim was reclassified as a non-priority general unsecured claim, as it was deemed a gratuitous promise rather than a bargained-for or necessary expense. Additionally, $1,861.71 in post-petition expenses was allowed as a priority claim, contingent upon the submission of proper documentation to the U.S. Trustee and payment upon plan confirmation.

Bankruptcy AdministrationAdministrative ClaimsPriority ClaimsSeverance PayPost-petition ExpensesFiduciary DutyOfficer CompensationDebtor-in-possessionEmployee ClaimsClaim Scrutiny
References
12
Case No. 08-02-00452-CV
Regular Panel Decision
Oct 23, 2003

Jesse Davila v. Pay & Save Corporation D/B/A Lowe's Market Place, Inc.

Jesse Davila appealed a summary judgment against him in favor of his former employer, Pay & Save Corporation, doing business as Lowe's Market Place, Inc. Davila was fired after another employee accused him of sexual harassment. He sued Pay & Save, alleging defamation, negligence, invasion of privacy, fraud, and intentional infliction of emotional distress. The trial court granted summary judgment for Pay & Save on all claims. The Court of Appeals affirmed the trial court's judgment, finding Davila failed to establish error regarding his claims, and denied Pay & Save's motion for damages for frivolous appeal.

Sexual HarassmentWrongful TerminationSummary Judgment AppealDefamation ClaimNegligence ClaimInvasion of PrivacyFraud AllegationIntentional Infliction of Emotional DistressEmployer LiabilityScope of Employment
References
15
Case No. MISSING
Regular Panel Decision

Balding v. Tennessee Department of Employment Security

This case involves former employees of Wilson & Company who sought unemployment compensation benefits after their employment was terminated due to a plant closure. They had received severance pay according to a contract between their union, United Packing House Workers of America, and Wilson & Company. Initial administrative decisions and the Chancery Court denied benefits, ruling that severance pay disqualified them. The Tennessee Supreme Court reviewed whether severance pay constituted 'wages' for the post-severance period, disqualifying them under the Tennessee Employment Security Law. The Court held that severance pay was 'with respect to' personal services rendered prior to the severance date, not after. It concluded that the appellants were 'unemployed' as of the severance date and were eligible for benefits. Consequently, the Court reversed the decision of the chancellor.

Unemployment Benefits EligibilitySeverance PayWages DefinitionTennessee Employment Security LawStatutory InterpretationCollective Bargaining AgreementPlant ClosureAppellate ReviewDisqualification CriteriaEmployer Liability
References
3
Case No. 03-12-00183-CV
Regular Panel Decision
Mar 19, 2014

Raymond Bloch// SAVR Communications, Inc. And OnAsset Intelligence, Inc. v. SAVR Communications, Inc. OnAsset Intelligence, Inc. VanOwen Group Acquisition Company, Inc. Adam Crossno And John Crossno// Cross-Appellee, Raymond Bloch

This case originated from a dispute over severance pay in an employment agreement. Raymond Bloch sought $95,000 in severance pay from SAVR Communications, Inc. and OnAsset Intelligence, Inc. after his termination. The Texas Workforce Commission initially denied his claim, interpreting a 1998 rule under the Texas Payday Act. The district court reversed the TWC's decision, deeming the 1998 rule invalid, and awarded Bloch the $95,000. However, the district court dismissed Bloch's claim for attorney's fees due to res judicata, a decision upheld by the Court of Appeals, which noted the Payday Act does not provide for fee-shifting.

Employment agreementSeverance payTexas Payday ActTexas Workforce CommissionWage claimJudicial reviewStatutory constructionAdministrative rulesRes judicataBreach of contract
References
29
Case No. 2019 NY Slip Op 04295 [172 AD3d 655]
Regular Panel Decision
May 30, 2019

Capital Bus. Credit LLC v. Tailgate Clothing Co., Corp.

The Appellate Division, First Department, affirmed a Supreme Court order regarding a dispute between Capital Business Credit LLC (plaintiff) and Tailgate Clothing Company, Corp. (defendant). Plaintiff purchased accounts receivable from a nonparty related to clothing manufacturing. Defendant paid some invoices but left 12 outstanding. Defendant claimed an equitable recoupment credit for payments made to the Worker Rights Consortium (WRC) for severance pay to Honduran workers, which became due after the manufacturer violated local law by not paying severance. The Court found issues of fact precluding summary judgment on the account stated claim and correctly sustained the equitable recoupment defense, noting it was based on transactions linked to the defendant's licensing and manufacturing agreements. The court also rejected plaintiff's waiver and estoppel arguments.

Equitable recoupmentAccount stated claimSummary judgmentAccounts receivableBreach of contractTimeliness of objectionLicensing agreementManufacturing agreementHonduran labor lawSeverance pay
References
6
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