Former Employees of Builders Square Retail Stores v. Hechinger Investment Co. (In Re Hechinger Investment Co.)

**Former Employees vs. Hechinger Investment Co. - What Workers Need to Know** This case involved former employees of Builders Square retail stores who were promised "Stay-On Benefits" when their employer, Hechinger Investment Company, filed for bankruptcy. These benefits were meant to encourage workers to keep working during the bankruptcy process rather than immediately looking for new jobs. The employees argued that all their Stay-On Benefits should be treated as high-priority administrative expenses in the bankruptcy, meaning they would be paid before other debts. The court disagreed with the workers. The Third Circuit Court of Appeals ruled that the Stay-On Benefits should be split into two parts: benefits earned before the bankruptcy filing and benefits earned after. Only the portion earned after the bankruptcy filing would be treated as high-priority administrative expenses. The benefits earned before bankruptcy would be treated as lower-priority general claims. **Why this matters for workers:** If your employer files for bankruptcy and offers you incentives to stay on the job, you may not be fully protected. The benefits you earn before the bankruptcy filing may be treated as regular debt, making it less likely you'll receive full payment. Workers in bankruptcy situations should understand that stay-on incentives don't guarantee priority payment for the entire benefit amount.