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Toys ‘R’ Us Signals Openness to Severance Pay

The now-liquidated company has filed a stipulation to enter negotiations with laid-off workers


NEW YORK, NY – Late yesterday afternoon, Toys ‘R’ Us filed a stipulation in bankruptcy court that grants a two-week period for the now-liquidated company to discuss a resolution to an employee claim for severance. The stipulation preserves the class proof of claim, meaning that plaintiff Ann Marie Reinhart Smith files on behalf of all Toys ‘R’ Us employees who were fired without severance. The move, filed on the legal deadline for action, signals an openness on the part of the company to negotiations.

With this new stipulation, the plaintiff and the debtor – Toys ‘R’ Us – have until July 23 to engage in conversation about a resolution to the claim for severance pay. In essence, it serves as a public notification of Toys ‘R’ Us’ willingness to resolve the claim outside of court and reach a solution favorable to laid-off employees.

Ann Marie Reinhart Smith, the plaintiff in the case, is a former Toys ‘R’ Us employee who worked at the company for 30 years before being laid off when it shut its doors on June 30. Along with thousands of Toys ‘R’ Us workers, she has advanced this effort with the support of Rise Up Retail, a movement of working people building a voice to advocate for good jobs in the retail industry. Workers have petitioned Congress, held protests in stores, spoken out in the press and on social media, pushed for responsible investment by pension funds who invest in private equity, and organized thousands of families hurt by losing jobs at Toys ‘R’ Us. Similar advocacy will continue throughout the summer. Rise Up Retail helped to connect Ms. Reinhart and the lawyers at Outten & Golden LLP, who are authorized to file the administrative claim on behalf of all 33,000 people laid off since the bankruptcy began.

“I come from the generation where you get rewarded for hard work. I devoted 29 years – my entire adult life – to Toys ‘R’ Us, as have many of my former colleagues,” said Ann Marie Reinhart Smith, plaintiff in the case. “To be let go with nothing, after being so loyal to the company, is humiliating. I hope that the resolution we come to will help to acknowledge the sacrifice and love that we brought to our work, and make sure that what happened to us becomes illegal so that no one has to go through what we did again.”

For Ann Marie, severance pay would mean being able to support herself and her husband while finding new work. Her unemployment benefits ended last week, making it even more challenging to pay her bills. When Toys ‘R’ Us shut its doors, Ann Marie not only lost her paycheck, but also lost her health insurance. Without insurance, her husband’s medical expenses have soared. Still, she expresses optimism about the legal claim and negotiations with the private equity firms.


Media Contact:

Lia Weintraub, lweintraub@populardemocracy.org, 202-618-2482