Ex-WorldCom Workers Want More Severance, Benefits

September 9, 2002 (PLANSPONSOR.com) - Former WorldCom Inc. workers trooped into US Bankruptcy Court in Manhattan to demand that the former telecommunications giant come across with tens of millions in unpaid severance and health benefits.

The Associated Press reported that the AFL-CIO provided legal help to the more than 40 ex-WorldCom workers who are pressing the court to require severance and benefits to at least 4,000 workers and maybe thousands more on top of that.

According to the AP,AFL-CIO president John Sweeney, asked two of WorldCom’s biggest creditors – AOL Time Warner and Metropolitan Life Insurance Co. – not to block the workers’ efforts.

In the four months before filing for bankruptcy on July 21, WorldCom laid off or said it would fire 12,800 people.

First worker payments

When bankruptcy proceedings began, the court allowed WorldCom to pay $22 million in severance to about 4,000 workers who had been let go. Each worker’s check was capped at $4,650 even though many employees had been promised much better packages.

WorldCom itself asked the court last week to let it pay $36 million more in severance it had promised – and to cancel lucrative severance packages it had given to 19 executives.

The company said those actions would improve the morale of its remaining employees. The motion is scheduled to be heard October 1.

The exact number of additional workers – and the total value of such payments – is unclear, said Lowell Peterson, an attorney for the former employees.

The union wants WorldCom to pay the severance in lump sums, as the company traditionally has done, rather than in installments, and make health coverage available retroactively.

With WorldCom in Chapter 11 bankruptcy proceedings – in the biggest such case in US history – the court must approve virtually every dollar the company spends and hear objections from creditors.