Wife can share in ex-husband’s ‘post-employment compensation’

A divorced man could be ordered to share with his ex-wife a sum of money that he received from his employer after he stopped working, the Rhode Island Supreme Court has decided.

The husband, Richard Beverley “Bev” Corbin III, had started working with a division of megabank Wells Fargo in July 2006. He signed an agreement to work as an at-will employee for two years.  By June 2008, things started to go sour. By September 2008 he and the employer couldn’t come to an agreement about his continued employment, so he took part in Wells Fargo’s dispute resolution process, signed a departure agreement and release of any claims he might have against the company and was given a $175,000 lump sum payment.

Corbin and his wife Anne subsequently decided to divorce. During the divorce proceeding, a family court judge ruled that the $175,000 lump sum payment represented “back wages” that should be considered part of the marital estate and awarded 50 percent of it to Anne.

Corbin appealed, arguing that Wells Fargo paid him the lump sum as severance pay, which made it “future compensation” which should not count as marital property.

But the Rhode Island Supreme Court disagreed. The court found that because Corbin was an “at will” employee, Wells Fargo didn’t need any reason to terminate him and thus had no obligation to provide severance pay absent any specific provision in his employment agreement.