Washington – Bed Bath & Beyond, a popular home goods retailer, is facing criticism from Democratic lawmakers over allegations of evading severance pay for thousands of employees who were laid off following the company’s recent bankruptcy. Sens. Elizabeth Warren of Massachusetts and Cory Booker of New Jersey have accused the company of “failing to treat retail employees with dignity in the bankruptcy process” in a letter addressed to Bed Bath & Beyond CEO Sue Gove.
According to the lawmakers, Bed Bath & Beyond denied some workers severance pay after filing for bankruptcy in April, which resulted in the closure of stores and staff layoffs. Additionally, the company provided misleading guidelines to some employees, leading to the denial of 401(k) matches for their contributions. The letter also claims that the company strategically announced layoffs of 1,295 employees one day before a New Jersey law went into effect, effectively circumventing legislation that provides enhanced protections to laid-off workers. However, after facing public pressure, Bed Bath & Beyond eventually reversed its decision and granted one week of severance pay for every year worked to the affected employees.
Despite requests for comment, Bed Bath & Beyond has not yet responded to the lawmakers’ letter. The company’s actions have drawn attention due to its history of spending $11.8 billion on stock buybacks for its executives since 2004. The retailer’s failure to adapt to the rise of e-commerce and keep up with competitors like Amazon has resulted in declining sales and the need to close stores and reduce its workforce. In an attempt to boost its share price, Bed Bath & Beyond accumulated additional debt by engaging in stock buybacks. A staggering $230 million was spent on buybacks in the first three months of 2022, just months before the company initiated store closures and layoffs.
In their letter, Warren, a member of the Senate Banking Committee, and Booker urged Bed Bath & Beyond to commit to providing severance to its workers. They also requested detailed information on the company’s severance policy, stock buybacks, dividends, and other related matters. The lawmakers expect a response from the company by July 19.
The lawmakers argue that the burden of the company’s losses has been unfairly placed on the workers who played a crucial role in running its business, managing retail stores, and fulfilling online orders. Meanwhile, shareholders and certain executives have seemingly escaped unscathed.
The allegations against Bed Bath & Beyond highlight the ongoing debate surrounding worker treatment and corporate responsibility. As the company faces scrutiny from lawmakers, the outcome of this situation could potentially have broader implications for how businesses handle employee layoffs and severance in the future.
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