More than two months since Barneys New York’s assets were sold to Authentic Brands Group, sparking liquidation sales at the former retailer’s remaining stores, a group of longtime employees say they still don’t know how this ends for them.
On Monday, a group of sales associates and other employees of Barneys’ Madison Avenue location in New York City told the federal bankruptcy court overseeing the case that they still haven’t been told when their employment formally ends, or received any guarantee of their pensions, or severance, or payments for unused benefits.
Some employees have simply left, rather than wait around for answers in the uncertainty, the employees said in their letter.
“We believe it is totally unreasonable that we have not been given any idea of what we are getting paid on closing,” the employees said. “We are assuming by law that we are entitled to these above mentioned benefits, but we are not lawyers, so do not know for sure.”
Generally, employers in New York don’t have to make severance payments to employees who are laid off, and what those employees are owed usually depends on the contract terms in question, employment attorneys said. Large employers with a well-established process for layoffs may have some sort of severance plan in place under The Employee Retirement Income Security Act of 1974, a federal law.
“Most employees don’t have contracts, but if they do, they may have clauses that provide for payments upon their termination under certain circumstances,” said Laurie Berke-Weiss, principal attorney of boutique employment firm Berke-Weiss Law PLLC, who is not representing any employees in the Barneys case. “Sometimes, employers are willing to negotiate severance pay on a case-by-case basis.”
The ongoing liquidation sales are being overseen by Great American Group, a subsidiary of B. Riley Financial Inc., one of Barneys’ debtor-in-possession lenders after it filed for Chapter 11 protection in August. B. Riley also teamed with ABG in its $271.4 million deal to buy Barneys’ assets, which closed in November.
Great American is not involved in the administration of employee severance, pensions or benefits, a representative for the company said Monday.