HARRISBURG, Pa. — Rite Aid unexpectedly withdrew severance payments from its laid-off associates, leaving workers upset and confused and lawmakers angered.
The Philadelphia-based drugstore chain has been closing stores and laying off workers since filing for Chapter 11 bankruptcy protection last fall.
State Reps. Patty Kim, Justin Flemming and David Madsen released the following joint statement regarding the news:
“We are disappointed and angered to learn Rite Aid not only isn’t paying laid-off workers the severance pay they are contractually obligated to receive, but Rite Aid actually went so far as to take already-paid money out of workers’ bank accounts. Rite Aid owes a lot of money to a lot of creditors as they navigate bankruptcy proceedings, but the first people who should get paid should be the laid-off workers who need the money they are owed to buy food, medicine, and heat -- not the banks, hedge funds and venture capital firms with billions in cash on hand."
They continued, demanding Rite Aid immediately pay laid-off employees, take responsibility for any overdraft or late payment fees by those impacted and never do this again.
In a statement to FOX43, Rite Aid said they took the severance payments back to temporarily preserve cash but will notify those impacted and resume payments by the middle of next week. The full statement reads:
Rite Aid made a difficult decision to delay severance payments to a group of former associates in order to preserve cash in the short term. Fortunately, we have resolved the matter and are resuming severance payments. Those who were impacted are being notified and can expect to receive their payments by the middle of next week. We deeply regret any inconvenience this has caused. We remain focused on making Rite Aid a stronger, healthier company for the benefit of all our stakeholders, including our associates.
