Recently, toy store giant, Toys R Us, closed their stores. The company, based in New Jersey, had 800 stores in the United States and about 33,000 employees. Forty of those stores are in New Jersey, which represents about 1,500 jobs. Long-time employees say that in 2005, a leveraged buyout of the company was the start of its recent financial woes, where private firms made a down payment on the purchase and have the company they purchased take out loans to finance the balance.
The firms caused Toys R Us to take out $5 billion in loans to generate revenue to pay back the firms, but the stores simply could not acquire that amount of cash. In its bankruptcy filing last year, the company cited $7.9 billion in debt against $6.6 billion in assets. Employees were sent a letter from Toys R Us saying that they will not be offering severance packages due to the company’s financial position. Yet, executives paid themselves millions of dollars in bonuses before the bankruptcy was filed in March.
Protests Held for Severance Pay
Severance packages are not required by law to be paid. Sometimes an employer will provide for a severance package in an employment contract with an individual employee. This usually only happens at the executive level. Common terms for severance negotiated in individual contracts usually provide a week or two of pay for each year of service. The Center for Popular Democracy organized a protest as part of its Rise Up Retail campaign. The group called for severance pay and accountability for the Wall Street owners who destroyed the company. Employees of the company are preparing to file suit in bankruptcy court to demand fair compensation.
Senators Cory Booker and Robert Menendez, and Representative Bill Pascrell, attended a protest and rally held in the parking lot of the Totowa, New Jersey store. Menendez stated that something is seriously wrong when more than 30,000 workers lose their jobs and those at the top walk away with millions. Representatives encouraged them to do the right thing. In a letter they wrote to the private firms, they pointed out that many employees who worked for the company for years are losing their jobs and have nothing to show for it.
New Jersey Employment Lawyers at Sidney L. Gold & Associates, P.C. Advocate for Workers’ Rights
If you have been wrongfully terminated or laid off, talk to an experienced New Jersey employment lawyer at Sidney L. Gold & Associates, P.C. Our employment lawyers understand complex labor laws and can advise you on your rights and recourse. Call us at 215-569-1999 or submit an online contact form. We are in Philadelphia, and we serve clients from the surrounding areas, including New Jersey.