Corpus Christi-based Nueces Electrical Co-Op has agreed to pay a former employee $46,920 in back pay and damages after it forced him to retire and tap his 401(k) retirement fund instead of granting him.
The employee, who had a serious health condition, asked for time off to obtain treatment. The company told him his two options were early retirement or termination. The company never advised him of his rights under the.
The employee was forced to cash out his 401(k) plan and incur early withdrawal penalties. His lack of income caused him to default on loan payments.
Under the settlement, the company will train its HR department, managers and supervisors concerning employee.
Note: This case illustrates how failure to provide accuratecan cascade into significant legal costs and damages. When an employee requests time off, step one for employers is to determine whether the leave could be covered by the FMLA. Then the company should look at other options before jumping to termination.