US bank SunTrust has pulled a U-turn on a policy requiring laid-off IT workers to provide the company with assistance for no compensation for two years after they have been let go, the company told the Guardian on Friday.
The “continuing cooperation” clause, first reported on by ComputerWorld magazine, would have required laid-off workers to provide the company with information or assistance for up to two years after they were let go. ComputerWorld described the clause as requiring the workers to be “on call for two years” – a characterization that SunTrust called misleading.
When asked about the clause and the employees being offered no compensation for such continued cooperation, Mike McCoy, the company spokesperson, said: “We understand that a clause in our severance agreement was misconstrued versus its use in actual practice and therefore, we have removed it.”
The clause originally read: “For a period of two (2) years following the end of my employment with SunTrust, I agree to provide assistance and to make myself reasonably available to SunTrust regarding matters in which I have been involved in the course of my employment with SunTrust and/or about which I have knowledge as a result of my employment with SunTrust.”
It went on to say that the “assistance” – which could include phone and in-person meetings, testimonies, interviews, trial or affidavits – would “not unreasonably” interfere with the former employees’ new jobs. While SunTrust would cover expenses incurred by the former employees, it would not compensate them for their time.
“I understand that I will not be entitled to any additional consideration or compensation of any kind from SunTrust in exchange for such assistance.”
SunTrust – which has close to 1,500 branches across the southern states – insisted that it rarely enforces the clause in question.
“It is a rare occasion when we need to call a former employee. The ‘continuing cooperation’ clause in our severance agreements is designed to assist the company under scenarios that arise infrequently when we need access to knowledge possessed by a former employee, primarily related to regulatory or legal matters,” McCoy told the Guardian, less than an hour before announcing that the clause would be removed from the severance package. “SunTrust has never used this provision to require a former employee to be ‘on call’ to help conduct day-to-day business in any way.”
Cooperation clauses are traditionally required for executives leaving “high-level positions”, Jonathan Segal, an attorney with the firm Duane Morris in Philadelphia and legislative director of the Society for Human Resource Management in Pennsylvania, told the Atlanta Journal-Constitution.
“There are times that a lower-level employee has institutional knowledge that is needed later. But it is the exception, not the rule,” he said.
In 2009, when William Reed JR retired from his post as the vice-chairman of the Atlanta-based bank, he too was required to agree to similar clause as part of his non-compete agreement. While he would receive no compensation for any continuing assistance offered over the following two years, he did receive $100,000 for signing the non-compete agreement.
Asked to confirm that it was laying off 100 IT employees, who were required to train the contractors that would replace them in the coming weeks, SunTrust neither confirmed nor denied the claim.
“In terms of the question about lay-offs: like all companies, we are constantly reviewing and adjusting our operations to ensure we’re meeting client needs effectively and efficiently, however we will decline to comment on any specific activities,”McCoy said.
According to ComputerWorld, layoffs are scheduled to begin on 1 November.
This article was written by Jana Kasperkevic in New York, for theguardian.com on Friday 23rd October 2015 17.03 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010