Q&A about SunTrust’s post-layoff cooperation clause
SunTrust has been gradually shifting work to IT outsourcers. At the end of last month, about 100 IT employees were recently notified of their imminent layoff. It was never announced publicly by the bank. Workers are now training, via Web conferencing and teleconferences, overseas contractor employees.
The SunTrust employees are dealing with their layoff, the loss of a well-paying job, the training of their foreign replacements and a severance agreement that has raised concerns.
The standard severance at SunTrust is two weeks of pay per year of service, said IT employees. One employee, who shared details of the financial terms of his severance, said he was offered exactly that: Two weeks per year. That's standard at a lot of firms.
But what isn't standard for mid-level or technical workers, say attorneys, is a continuing cooperation agreement.
"For a period of two (2) years following the end of my employment with SunTrust, I agree to provide assistance and to make myself reasonably available to SunTrust regarding matters in which I have been involved in the course my employment with SunTrust and/or about which I have knowledge as a result of my employment with SunTrust. It is understood and agreed that such assistance, to the extent possible, will be requested at such times and in such a manner so as to not unreasonably interfere with my subsequent employment. Such assistance may include, but is not limited to, telephone or in-person meetings with SunTrust employees, attorneys and/or accountants, or the provision of truthful testimony by way of deposition, hearing, trial, interview, subpoena response or affidavit. SunTrust will be responsible for any reasonable and necessary expenses incurred by me and approved by SunTrust in connection with such services. I understand that I will not be entitled to any additional consideration or compensation of any kind from SunTrust in exchange for such assistance."
They see it essentially as an on-call requirement, an abuse and an effort steal time from them.
A statement from a bank spokesman: "It is a rare occasion when we need to call a former employee. The "continuing cooperation" clause is designed to assist the company under scenarios that arise infrequently when we need access to knowledge possessed by a former employee. Those scenarios primarily relate to regulatory or legal matters. For instance, we may need to reach out to former employees to ensure we accurately understand situations in which they were involved while employed by the company. SunTrust has never used this provision to require a former employee to be "on call" to help conduct day-to-day business in any way."
The bank's statement said any request for help will be a "rare occasion" and "infrequent," but the cooperation clause as it currently stands offers no such assurance.
The bank also said, in response to Computerworld's publication of the clause, that any request for help will be primarily in response to regulatory or legal matters. But the language in this clause appears broader than something SunTrust filed with the U.S. Securities Exchange Commission.
In 2009, SunTrust filed with regulators a "noncompete, wavier and release agreement" it had made with an executive who was retiring from the bank. The executive was paid $100,000 to sign it. It included a two-year cooperation agreement. (The IT employee agreement borrows some of its language, but differs in other respects. The full agreement with the former executive is here; scroll down for the cooperation clause.)
The cooperation agreement for this executive says in part: "I agree ... to provide assistance and to make myself reasonably available to SunTrust and its employees, attorneys and/or accountants with respect to investigations, audits, litigation or potential litigation regarding matters in which I have been involved in the course of my employment with SunTrust."
This sentence in the executive's clause appears to narrow cooperation to legal issues in a way that the severance agreement with IT employees does not.
SunTrust's transition to IT contractors is happening at a seemingly quick pace, with layoffs scheduled to begin Nov. 1. The employees were notified of their layoff around the end of September, or approximately five weeks before the layoffs are scheduled to happen. The typical layoff time is three months from the time of notification, but it's not unusual to extend to a year.
The vendors are shadowing the IT workers electronically and recording every step, but this doesn't necessarily ensure a successful transition. The offshore vendors may understand how something is done, but not know the why. There is lot of organizational knowledge that isn't easily transferred, said one employee.
In offshore transitions it is not uncommon for some of the former IT employees to be asked to return, either by the original employer or the IT contractor. When this happens, contracts with pay are offered.
The inclusion of the cooperation clause may be a problem for SunTrust.
Based on some of the feedback from employees, the bank's cooperation clause is, in effect, a non-cooperation clause. It's become an incentive not to help.
In a report by the Atlanta Journal Constitution, attorney Jonathan Segal, with the firm Duane Morris in Philadelphia, advised employers to avoid further aggravating affected employees -- in other words, those who are being laid off. "What gets someone to a lawyer is often a question of, 'I'm angry. I feel abused,' " said Segal, the newspaper reported.