Laid-Off WorldCom Workers Seek More Severance Pay
Bankruptcy Court Asked to Increase Limit

By Christopher Stern
Washington Post Staff Writer
Tuesday, September 10, 2002; Page E01

Former WorldCom Inc. employees asked a federal bankruptcy court yesterday to approve an additional $36 million in severance payments to 4,000 employees who have been laid off by the financially troubled telecommunications company in recent months.

The court has already approved $22 million in payments to laid-off workers, but each person could get only $4,650 because of a cap set in place by bankruptcy law -- far below what some employees said they are owed.

The AFL-CIO filed a motion yesterday to raise the cap. The request follows a similar move by WorldCom last week.

"We have always believed it was the right thing to do," WorldCom spokesman Brad Burns said in reference to the company's petition to make good on its severance obligations.

WorldCom, which is the parent company of MCI Group and Internet provider UUNet, has laid off approximately 2,000 employees in the Washington area during the last four months.

WorldCom filed for protection from its creditors in July, the largest bankruptcy filing ever. Since then, every major expenditure by the nation's second-largest telecommunications company must be approved by the bankruptcy court.

U.S. Bankruptcy Court Judge Arthur J. Gonzalez is scheduled to hold a hearing Oct. 1 on the severance payment and other issues. Just last month, Gonzalez agreed to boost the limit on severance payments to employees laid off by Enron Corp. to $13,500.

WorldCom has not only asked the court to exceed the $4,650 cap on individual payments but also to cancel "enhanced-severance agreements" with 19 executives. Those agreements would have paid the executives a total of $900,000.

"The employees need the money now, are owed the money now and should get paid the money now," said Kathy Roeder, an AFL-CIO spokeswoman.

The filing by the AFL-CIO also asks the court to order WorldCom to turn over documents that detail how much employees are due for such things as severance, vacation pay and health benefits. "It's difficult to say how much employees are owed because WorldCom has all the numbers," Roeder said.

The AFL-CIO said receiving a severance package should not preclude employees from later joining a lawsuit against the company over the investments it offered in its 401(k) retirement plan -- a mix some claim was too heavily weighted with WorldCom stock.

Burns declined to comment in detail on the language contained in the severance agreements. "It's a standard release that is very common among many large companies," Burns said.