Bed Bath & Beyond logo is seen on the shop in Williston, Vermont on June 19, 2023.
Jakub Porzycki | Nurphoto | Getty Images
WASHINGTON — Home goods retailer Bed Bath & Beyond is facing scrutiny from Democratic lawmakers for allegedly evading severance pay for 1000’s of employees laid off after its recent bankruptcy.
The corporate, which has spent $11.8 billion in stock buybacks for its executives since 2004, is “failing to treat retail employees with dignity within the bankruptcy process,” in keeping with a letter to Bed Bath & Beyond CEO Sue Gove from Sens. Elizabeth Warren of Massachusetts and Cory Booker of Latest Jersey.
The lawmakers claim Bed Bath & Beyond denied some employees severance pay after it filed for bankruptcy in April and started closing stores and shedding employees. Other employees were denied 401(k) matches for contributions after receiving misleading guidelines, the letter states.
The failed big box store also announced layoffs of 1,295 employees a day before an April 10 Latest Jersey law went into effect, effectively dodging the law that gives enhanced protections to laid-off employees, the letter claims. The corporate later reversed course after public pressure and issued one week of severance for each yr worked to those affected employees.
Bed Bath & Beyond didn’t immediately return request for comment on the lawmakers’ letter.
For several years, Bed Bath’s business had been crumbling because it didn’t adapt to the rise of e-commerce and sustain with competitors like Amazon. Because the retailer reported sagging sales and announced plans to shut stores and cut employees, it took on more debt to purchase back stock in a bid to spice up its share price.
A record $230 million in buybacks was purchased over three months in the beginning of 2022, only months before store closures and layoffs began.
“Consequently, the employees who ran your small business, staffed your retail stores, and fulfilled online orders are being forced to shoulder the brunt of the losses, while shareholders and a few executives walk away unscathed,” the lawmakers wrote.
Warren, a member of the Senate Banking Committee, and Booker asked Bed Bath & Beyond to commit to providing severance to its employees and for detailed information on its severance policy, stock buybacks and dividends and other related issues. The Democrats asked for a response by July 19.
