Bed Bath And Buybacks: Booker, Warren Push Company On Severance Pay

NEW JERSEY — Two U.S. senators are accusing Bed Bath & Beyond of prioritizing “profits for shareholders” ahead of the workers who are losing their jobs, as the company embarks on a massive wave of store closures and layoffs across the nation.

On Wednesday, senators Cory Booker of New Jersey and Elizabeth Warren of Massachusetts sent a letter to Bed Bath & Beyond CEO Sue Gove, urging the company to dish up more information about severance pay for workers and an “astonishing” $11.8 billion in stock buybacks that have been made since 2004. Read their full letter here.

According to Booker and Warren:

“Following years of declining profits, Bed Bath & Beyond declared bankruptcy in April of this year. Despite the more than $11 billion paid out in buybacks, the company is now attempting to avoid paying severance to its thousands of laid-off workers. In February 2022, Bed, Bath & Beyond reported spending $230 million on stock buybacks over the course of three months, just months before closing its stores.”

The retail giant stopped paying severance to dismissed store employees in April, according to Bloomberg.com. That month, it cut about 1,300 workers in New Jersey – just one day before expanded severance pay laws took effect in the state.

Under the law, if a business with 100 or more employees is laying off 50 or more workers in New Jersey, the company must pay them one week of severance for every year the worker was employed. Severance must be paid to both full- and part-time workers. Read More: 3 New Laws That Could Impact Your Life In NJ

As the New Jersey Monitor noted, the bill was proposed after Toys ‘R’ Us declared bankruptcy in 2018 and closed 735 stores without paying severance to tens of thousands of workers, including more than 2,000 in New Jersey. Read More: Federal Reps Demand Severance Pay For 33,000 Toys R Us Workers

“We knew Bed Bath was in trouble, but we thought we would have at least a couple more years,” a longtime employee in New Jersey told CNN, adding that the company also told employees it would not match annual contributions to their 401(k) retirement savings plans they paid into for all of 2022.

• See Related: Bed Bath & Beyond Files For Bankruptcy, NJ Closing Sales Start

After an outcry, Bed Bath & Beyond is reportedly providing severance pay to the 1,300 impacted employees in New Jersey. But lingering questions remain when it comes to what the company is planning to do in other states that don’t have similar protections, Booker and Warren said.

“While your company has – under enormous public pressure – reversed course in New Jersey and agreed to recognize the newly expanded protections, employees in other states are still left without protection and have reported being stiffed on severance and other benefits they were owed,” the lawmakers wrote.

According to Booker and Warren, after the company’s revenues dropped 16 percent from 2019 to 2020, it continued engaging in its “aggressive stock buyback strategy.” In their letter, the lawmakers requested that Bed Bath & Beyond answer questions about its actions leading up to their bankruptcy declaration, in addition to providing severance and benefits for its employees.

“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 do even the bare minimum to treat employees fairly in the bankruptcy process,” Booker and Warren concluded.

• See Related: Overstock.com Bids $21.5M For NJ-Based Bed Bath & Beyond's Assets, IP

This year, a number of other employers like Walmart, Bed Bath & Beyond, and Misfits Market have announced big layoffs in New Jersey.

This article contains reporting by Michelle Rotuno-Johnson, Patch Staff

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