Severance Pay Claims Not For Juries, Court Agrees

The U.S. Supreme Court earlier this week decided not to hear the appeal of a former manager who argued that he was entitled to a jury trial on his claim for severance benefits. Peter Tischmann, the former vice president and managing director of the St. Regis Hotel in New York City -- who was fired in 1992 for violating the sex-harassment policy of the hotel's owner, ITT Sheraton Corp. -- had originally been awarded $364,000 in severance pay after a jury trial. But a federal magistrate later ruled that the severance plan was covered by the Employee Retirement Income Security Act, which specifies claims for benefits must be decided by a judge, and the ruling was upheld in appellate court. By its silence, the Supreme Court agreed with the hotel that the severance pay was not a contractual claim. The hotel had argued that the severance plan, which guarantees executives two years of pay unless they are fired for cause, is not part of the employment contract.

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