Store contests severance pay.

Byline: Edward Russo The Register-Guard

Scores of former and current workers of bankrupt Troutman's Emporium are battling the department store chain over severance pay.

More than 80 former and current employees contend through U.S. Bankruptcy Court filings in Eugene that they are owed one week of severance for each year worked. Eugene-based Emporium claims it changed the severance policy in May 2001 and is required to pay much less than that to employees who are laid off.

The firm, for example, says an employee with seven years at Emporium would be eligible for four weeks of severance, not seven.

Ralph Matteson, a former Emporium merchandise buyer, said the company did not tell employees about the policy change in 2001, and that they first learned about it during the retailers' bankruptcy.

Emporium "had a legal obligation to inform us that the circumstances of our employment had changed and they did not inform of us that," he said. "I think we have a pretty strong case."

Emporium's attorney, William Potter, said the firm disagrees with employees' contention that they were not told.

If Emporium and the employees cannot reach a settlement, U.S. Bankruptcy Court Judge Albert Radcliffe will have to decide the matter. Emporium expects to close all of its stores by the end of May.

The issue is important to employees, who have either lost their jobs or expect to soon. These employees include relatives of Emporium founder and majority owner Dallas Troutman. The employees say they are owed a total of nearly $1 million, or an average of about $11,000.

The stakes are also significant to Emporium, which is selling off assets to pay off thousands of creditors owed a collective $30 million.

One employee who filed a claim last week said that under the previous policy of one week of severance for each year of employment, he would be due $11,666 when his job ends on May 31. However, the 14-year employee said that if the company is allowed to use its new policy, he will receive only $6,666.

The impact on long-term, high-paid employees is especially great. Emporium says its 2001 policy would limit employees with 16 or more years of service to 10 weeks of severance. However, Melvin Small, an employee since 1972 and manager of the Emporium in Beaverton, argues he is due far more than that, and last Friday filed a severance claim for $36,663.

Mike Troutman, a 30-year employee, a former merchandise buyer, and son of Dallas Troutman, filed a claim for $31,740. Alan Hansen, manager of the south Eugene store, an employee since 1979 and a nephew of Dallas Troutman filed a claim for $17,985.