Workers Asked to Return Severance Overpayment

A computer disk factory that overpaid dozens of former workers thousands of dollars in severance pay wants them to “kindly return” the difference.

San Jose-based Komag Inc. laid off hundreds of workers at its Eugene plant in January and issued them severance checks.

But about 60 of those workers, and an undetermined number of California employees, got too much money. Many have already returned the money to Komag, but some said they already spent it and can’t pay it back.

Komag is $470 million in debt and owes an additional $100 million by the month’s end. The company has reported losses every quarter since 1998 and closed its Eugene plant this year.

Alexandria Scholes, of Eugene, received $1,214.28 in extra pay.

“I don’t have the money to pay it back right now,” she said. “Until I can get a job, there’s not a whole lot I can do to take care of that problem.”

Employment lawyers said the case is unusual--and difficult to resolve--because the workers are no longer on Komag’s payroll. Typically, a company can deduct the difference from a future paycheck, said Christine Hammond, administrator of the Oregon Bureau of Labor and Industries wage and hour division.

Hammond said the case is not the responsibility of the BLI, which handles cases in which companies pay employees too little.

Most of the employees said they didn’t realize they were overpaid because the severance money was lumped in with vacation pay and a final paycheck.

“I assumed they knew what they were doing,” Scholes said.

Scholes received three letters from Komag. The most recent was from the company’s San Francisco-based attorney, Donna Rutter.

“Komag is going to take all the necessary steps to get back this money that they’re entitled to,” Rutter said.

That could entail filing civil lawsuits against employees who haven’t repaid the money or arranged to do so, she said.

On Friday, Komag shares closed up 2 cents at 41 cents on Nasdaq.