Montana High Court Rejects Late Severance Benefits Claim

The unanimous court ruled that John Patterson Jr. gave up his right to a severance package from Verizon Wireless and its affiliate, Air Touch Communications, when he decided to pursue the discrimination claim against Verizon. To be eligible for the severance, Patterson would have been required to release the employer from all future legal claims relating to Patterson.

“Patterson’s filing of a claim against Verizon was completely inconsistent with the terms of the offer, making it impossible for him to accept it,” said the opinion by Justice Jim Rice. “As such, in filing the claim, he effectively rejected the severance package offer.”

According to the opinion, Patterson had been employed as a district manager by Air Touch Communications, an affiliate of Vodafone Air Touch Plc, one of two parent companies of Verizon Wireless. In 2000, Vodafone and Bell Atlantic, the other parent company, agreed that the new Verizon Wireless would be staffed by “seconded” employees – employed by Vodafone but loaned to Verizon.

Verizon notified Patterson by letter in May 2000 that he had been assigned to work exclusively for Verizon, the court said. The letter explained that although Patterson would be working for Verizon, he would remain an employee of Air Touch. Verizon, however, had the “absolute right” to fire “seconded” employees, the court noted.

Five months after Patterson began working for Verizon, his position was eliminated in a restructuring, effective December 1, 2000. He was notified by letter that he was eligible for the Air Touch Communications Severance Plan and that he could receive almost $24,000 if he chose to participate. However, according to Rice’s ruling the plan required employees to sign a “severance agreement and release,” releasing Air Touch and its affiliates from any present or future claims pertaining to employment or termination.

Patterson chose instead to file an employment discrimination claim against Verizon in December 2000. When the Montana Human Rights Commission dismissed the claim a year later, Patterson signed the release and mailed it to Verizon, the court said.

The company balked at honoring the severance claim, citing the one-year delay in Patterson’s response, the termination of the severance plan, and Patterson’s employment discrimination claim. Patterson sued in state district court, claiming entitlement to the severance benefits, but the court granted summary judgment to Verizon.

The opinion in Patterson v.Verizon Wireless, Mont., No. 04-637, 10/25/05 is here .