Former Chico's employees who were laid off protest getting no severance

A site for a company celebration in February became ground zero for a worker protest on Monday against Chico's FAS.

In February, the Fort Myers-based retailer cheered the opening of its flagship Chico's, Soma and White House Black Market stores at the Daniels Marketplace after relocating them from the nearby Bell Tower Shops.

A much different scene unfolded during the protest, as recently laid-off workers chanted outside the storefronts, claiming they've been mistreated and cheated out of severance.

"Hey, hey. Ho, ho. Corporate greed has got to go," they recited.

The new location at the shopping center off Daniels Parkway gave the trio of stores more visibility side by side — and the former workers at the company's headquarters used that visibility to bring attention to the retailer's refusal to pay them the severance they say they expected and deserved — and had been promised as part of their employment.

Some of the protesters had worked at the corporate offices for a decade or more and none of them received severance. It has been a longtime company policy and something employees have relied upon as a safety net.

Although the protest only involved about a dozen workers, a major restructuring last week blamed on the coronavirus pandemic resulted in an estimated 200-250 job cuts at the corporate offices. 

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The headquarters remains closed due to the pandemic, with its remaining corporate employees continuing to work remotely, with 50% pay cuts.

Company stores opened for curbside pickup only on Monday, as part of a phased reopening plan the retailer announced last week, along with a host of leadership changes, including the appointment of a new president and CEO. 

The peaceful protest lasted about an hour, wrapping up a few minutes before 10 a.m., when the lights turned on at the three stores in the Daniels Marketplace for the first time in more than six weeks.

Protesters held signs with such slogans as "Evil, Evil Chico's" and "We Deserve our Severance."

"Unprecedented circumstances"

In a statement, Bonnie Brooks, CEO and president of Chico’s FAS, said: "Last week, the company had to make decisions that resulted in people losing their jobs. These decisions were heartbreaking for us and for our teams to make and under normal circumstances would never have happened. But these are unprecedented circumstances."

Under normal circumstances, the company would not be laying off its "valued team members" without severance, she said.

"The government stimulus package was designed specifically for cases like ours, where companies can simply no longer pay all of their employees, and the stimulus payments are not available while one is receiving a severance," Brooks said. 

One of the protesters, Rachael DaSilva, 48, worked for the retailer for 14 years as a producer of its promotional photos and videos for its websites.

"I've saved them millions and millions of dollars with what I do," she said.

Yet, she said she'll get not a penny of severance, which the company has offered with other rounds of layoffs to her former co-workers, who lost their jobs through no fault of their own.

"Your position has been eliminated," she said. "That's what I was told."

DaSilva said she's not asking for any special treatment.

"Chico's has done the right thing up until now," she said. "They have been laying off people and giving them severance. We know that for a fact. This is not the first time they have laid people off, I mean the company has been suffering."

Since 2015, the retailer has reported several rounds of layoffs, as part of cost-cutting initiatives to turn the business around.

When DaSilva asked her bosses why she would receive no severance, she said they told her the company was "not in good standing" to offer it. 

Meanwhile, she said, the company posted one of its best quarters in years before the coronavirus struck.

Historically, workers who got laid off received two weeks of severance for every year they'd been with the company. Severance has resulted in some big payouts in the past.

When Shelley Broader abruptly resigned as CEO and president of Chico's FAS last year, for example, the company deemed it as "an involuntary termination" of her employment, making her eligible to collect more than $2.2 million in cash as part of her severance package.

"Severance for all"

DaSilva and other protesters heard that some of the higher-up executives and directors who were let go last week did get severance, making them more upset.

"Equal severance. For all," they chanted in that vein.

"We are just asking for the same equality, the same kind of humanity for us," DaSilva said. "That is what we're asking for. Just do the right thing."

Unlike many others who had been furloughed, DaSilva never stopped reporting to work for Chico's throughout the pandemic, taking a 50% pay cut, just like everyone else who stayed on the payroll.

She said she's grateful that she'll receive money for her accrued time off at 100% pay. "So that is honest," DaSilva said.

DaSilva is also thankful that her medical benefits will continue for a month, but she's not sure if she can make much use of it since many doctor's offices remain closed due to the pandemic, she said.

As a single mom in a more specialized field, DaSilva is concerned about her prospects for landing another job like the one she had at Chico's, especially in such a small market as Fort Myers.

"It is a little on the scary side," DaSilva said.

She would have been entitled to 28 weeks of severance pay, if it had been offered as it has in the past, which would have made her feel a lot less pressured now, she said.

"I am very, very nervous," DaSilva said. "The market is not easy. It's a pandemic."

There are more than 30 million people laid off or unemployed nationwide.

"I'm competing with another 30 million people trying to find jobs," she said.

Laura Melbourne, who had been with the company for two years, said she felt Chico's had thrown its lower-level corporate workers to the wolves.

"It's a hometown story gone wrong," she said. 

Melbourne, 55, was hired to fill a new role as a customer experience strategist, with the job of building customer loyalty, especially digitally. Ironically, she said, the company recognized her with a coveted excellence award in September, then let her go last week to her surprise.

Her innovative products, she said, made millions for the company, yet it can't pay her or hundreds of others severance for the hard work they've done over the years.

"They're a company that says: 'We are customer first.' And I was the only one that had that job. Now that job is no longer. They have no one representing that position."

She'd been furloughed, receiving no pay for weeks, before her job got eliminated, leaving her household of three with no income. Her partner, who was with the company for more than a dozen years, also lost her job at Chico's.

"We have nothing to fall back on, other than that we've planned for the future," Melbourne said. "We are taking away from our future to pay for our now."

She said she's trying not to take the elimination of her job personally, but it's difficult not to.

"Right now they are in the survival mode business mindset," Melbourne said. "They made a decision based on economics, purely. That makes sense, but you can't help but take it personal, especially when you've given up everything for this company."

The retailer's actions, she said, have left the employees who are still with the company "terrified" that they could be the next ones to suddenly lose their jobs, without any severance pay to help them transition into new ones.

Without the guarantee of severance, she questions whether employees will be willing to work so hard for the company — or whether they'll even want to stay, if another opportunity comes their way.

"They are going to have a mass exodus of talent," Melbourne said.

While top executives took 50% pay cuts like everyone else who stayed on the payroll in April, she said it doesn't hit the same way when you're salary is $1 million or more, so it's unfair.

Taking it hard

Another protester, Damisa Cooper, 26, said she'd been with the company for about two years.

A recent graduate of Florida Gulf Coast University in south Fort Myers, she first worked as an "allocator", involving product placement in stores, then moved into digital marketing. 

Like many others, she was furloughed for weeks, receiving no pay, and hoped to return to work. 

"I was surprised at the number of people that were affected by layoffs," she said. "I was more shocked that they weren't actually giving severance."

When she asked about severance, she was told it was "just a clause," and that it had been dissolved.

"I applied for unemployment," she said. "It has been a nightmare to do that. I applied as soon as I could."

Meanwhile, she's looking for another job and tapping her savings that she hoped to use for travel one day.

"I don't really know what's going to happen," Cooper said. "I'm just praying I'll be able to find a job. My landlord is working with me. Thank God. So I do have a little flexibility now."

She's also grateful she doesn't have any student loans to worry about.

"I do have friends who are still working at Chico's, who are only getting a reduced pay rate, who have substantial loans. They are working, but they are not able to cover their bills at all."  

In an email, retail analyst Susan Anderson, with B. Riley FBR, pointed out that Chico's has taken many steps to cut costs, including suspending its dividends. It's not the only retailer forced to make big job cuts due to the coronavirus pandemic, which has forever changed the industry, she said.

"We are hearing other retailers doing layoffs," Anderson said. "It varies from retailer to retailer on the amount, but they are cutting people because they believe this has permanently altered the way consumers will shop."

The pandemic forced the retailer to close all of its 1,340 stores in North America on March 17.

"Our stores are our main source of revenue," Brooks said. "The company has already cut its expenses across all areas, is not paying rent to its landlords and has stopped or slowed all payments to vendors for all products."

The company is committed to keeping as many employees as possible at its headquarters, she added.

"Some of our employees are deeply affected by the loss of their jobs and of course do not feel this is fair, which we understand, because nothing about the impact of this virus on our employees or any employee who loses their job, is fair. Nothing about the world’s economic crisis due to the pandemic is fair.”