Bed Bath & Beyond logo is visible on the shop in Williston, Vermont on June 19, 2023.
Jakub Porzycki | Nurphoto | Getty Images
WASHINGTON — Democratic lawmakers have turned their attention to home goods retailer Bed Bath & Beyond over allegations of evading severance pay for thousands of employees laid off following the company’s recent bankruptcy filing.
According to a letter from Sens. Elizabeth Warren of Massachusetts and Cory Booker of New Jersey to Bed Bath & Beyond CEO Sue Gove, the company, which has spent $11.8 billion on stock buybacks for executives since 2004, is accused of “failing to treat retail employees with dignity in the bankruptcy process.”
The lawmakers allege that Bed Bath & Beyond denied severance pay to certain workers after filing for bankruptcy in April and initiating store closures and layoffs. Additionally, misleading guidelines resulted in some workers being denied 401(k) matches for contributions.
The letter claims that the company intentionally announced layoffs of 1,295 employees one day prior to the effective date of an April 10 New Jersey law that offers enhanced protections to laid-off workers, effectively circumventing the law. However, the company reversed its decision and provided one week of severance for each year worked after facing public pressure.
Bed Bath & Beyond has not yet responded to the lawmakers’ letter.
In recent years, Bed Bath & Beyond’s business has suffered due to its failure to adapt to the rise of e-commerce and keep up with competitors like Amazon. As the retailer experienced declining sales and announced store closures and job cuts, it resorted to accumulating more debt in order to repurchase stock and boost its share price.
The company spent a record $230 million on buybacks in the first three months of 2022, just before initiating store closures and layoffs.
The lawmakers wrote, “As a result, the workers who ran your business, staffed your retail stores, and fulfilled online orders are being forced to shoulder the brunt of the losses, while shareholders and some executives walk away unscathed.”
Warren, a member of the Senate Banking Committee, and Booker have called on Bed Bath & Beyond to commit to providing severance to its workers and to provide detailed information on its severance policy, stock buybacks, dividends, and related matters. The Democrats requested a response by July 19.
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