Senators Elizabeth Warren and Cory Booker are pressing Bed Bath & Beyond Inc. on an earlier move to flout employee severance pay as mass lay-offs roiled the bankrupt retailer’s stores across the country in recent months, according to a letter seen by Bloomberg News.
The company stopped paying severance to dismissed store employees in an effort to preserve cash before going bankrupt in late April. In its home state of New Jersey, it cut about 1,300 workers on April 9 — just one day before expanded severance pay laws took effect in the state.
Bed Bath & Beyond eventually opted to provide severance to the 1,300 employees. But in a letter sent Wednesday to Chief Executive Officer Sue Gove, the senators requested additional information about the company’s mass layoffs, including how much of the additional cash borrowed to finance its bankruptcy will go to employee severance.
“Your company has a responsibility to your workers, and it’s clear that after years of putting profits for shareholders ahead of those responsibilities, and endangering the health of its business, Bed Bath & Beyond is still failing to treat retail employees with dignity in the bankruptcy process,” Warren (D-MA) and Booker (D-NJ) wrote in the letter.
Read More: Bed Bath & Beyond Paying No Severance in Recent Store Closings
Warren and Booker chastise the company for billions of dollars in stock buybacks undertaken over the last two decades — what they call a desperate attempt to bolster the company’s share price at the business’s expense. Even as revenue plummeted, the retailer continued with its aggressive buyback strategy, according to the letter.
A representative for Bed Bath & Beyond didn’t respond to a request for comment outside of normal business hours.
Bed Bath & Beyond isn’t the first major retailer to face criticism over severance pay in bankruptcy. Toys “R” Us workers were denied severance pay during the company’s bankruptcy, only to win a $2 million settlement months later.
--With assistance from Jeannette Neumann.
