For employees who are not covered by a union or employment contract, there is no law that requires a severance package to be offered to any employee. As downsizing is becoming more common and employers are going out of business, the amount of funds available for severance agreements is drying up.
Also, the court system has not always been on the employee’s side, especially when the employee is going up against a large employer. In today’s economy, many employers are taking the chance that they will be able to successfully fight a discrimination lawsuit if they terminate employees. Especially in cases where the employer is cutting back on jobs across the entire company, it is easy to convince the EEOC or a state’s human rights office that these terminations were done only for business reasons and not with any discriminatory intent.
There are several national employers that do not bother to offer a severance package to employees they terminate until they see if the former employee is going to hire an attorney to file an EEOC complaint.