Bank of America tries to reclaim severance

Bank of America Corp. has sent letters to about 70 employees laid off during its merger with FleetBoston Financial Corp. asking them to repay a portion of the money they received in severance.

The bank had agreed to pay the former workers for a certain number of weeks as they searched for new jobs. But in the letters sent to them, Bank of America said it had overpaid, and it asked the employees to send a check to Fleet.

One former worker, Alisa R. Drayton of Roxbury, said the bank asked her to send a check for more than $7,000 in December. ''I thought it was so mean-spirited. Why would you send this a week or two before Christmas?" said Drayton, who worked as a corporate finance associate for Fleet's securities unit and is currently unemployed.

When Drayton still hadn't paid in February, the bank sent another letter asking for more than $9,000. Another former Fleet employee, who did not want his name used, also said he got a letter asking for about $9,000, which he has not paid.

A Bank of America spokeswoman, Alex Liftman, said an error led to extra severance pay. ''When an error of this nature occurs, either overpayment or underpayment, we take steps to correct it," she said. She also said, ''We regret the inconvenience."

Bank of America has cut 2,900 New England jobs in its merger with Fleet, including about 1,400 in Massachusetts. Those laid-off employees received severance packages, in which the bank agreed to keep paying them for a certain period of time after they left the bank. Those employees making more than $75,000 got four weeks' severance per year of employment, plus nine extra weeks on top of that, a package considered generous in the industry.

Several of the bank's top managers worked out separate deals, with two, Eugene M. McQuade and Bradford Warner, leaving with severance and other payments that totaled about $25 million and $20 million, respectively. Chad Gifford, Fleet's former chief executive, retired this year with about $16 million in severance, as part of a deal he had worked out during Fleet's previous merger with BankBoston Corp.

For the former employees who received letters from the bank asking for severance pay back, the issue comes down to the agreements that each employee signed before being laid off. In them, the bank told employees how many weeks of severance it would pay and gave them a date when that payout would start. The bank claims that it paid the employees beyond the specified term by mistake, but some of the employees claim they received the proper amounts.

The bank discovered the severance problem when it noticed that it had overpaid the severance of one former employee, said Liftman, the Bank of America spokeswoman. Bank of America then conducted an audit and found more instances of overpayment, she said. She declined to provide additional details of the audit, including when it was performed, how many former employees it included, and if it included top executives' severance. She also declined to elaborate on the error that led to the overpayment.

Drayton, the former Fleet employee, has not paid the bank back, but Liftman said a majority of the other employees who got letters already have sent in checks.

To reclaim the severance, the bank sent letters to the former employees. ''This letter is to notify you that you have been overpaid $9,381.47," Fleet wrote in the first line of a letter sent to Drayton in February, which was obtained by the Globe. It gave her an automated number to call if she had questions about the assessment. The bank, acting through its human resources vendor, Fidelity Investments, signed the letter simply ''Fleet HR Service Center."

Fidelity handles human resources outsourcing work, such as payroll and 401(k) administration, for thousands of clients, including Bank of America. A Fidelity spokesman, Vincent Loporchio, declined to comment on the Bank of America letters but said the firm views it as normal business practice to collect overpaid severance.

But other human resources specialists said it is unusual for Bank of America to ask employees to return the money, even if it did overpay. Kathy Rice, a human resources management consultant, said the bank would have been wise to let the money go ''as a cost of doing business." The negative publicity and effect on employee relations likely outweigh any money that the bank would get back, she said.

''My experience is that if there was an administrative error, the error was absorbed by the organization," she said. ''It wasn't the employee's fault, and the employee was in the process of losing their job."

But she also said former employees bear some responsibility to tell the bank if they realize they are being overpaid.

Whether former employees are legally required to pay the severance money back to Bank of America will depend in large part on the original agreements they signed, said Tom Gallitano, a partner in the law firm Conn Kavanaugh Rosenthal Peisch & Ford. If the bank paid the employees the amount in the contracts and did not overpay, it could have a hard time getting any money back, he said. But if the bank paid them more than the original agreement amount by mistake, it might have a better case, he said.

The Bank of America spokeswoman, Liftman, declined to comment on whether the bank will take legal action if the former employees do not return the money. She said the bank will work with the employees to determine how they repay the severance.

Sasha Talcott can be reached at stalcott@globe.com.