- Sens. Elizabeth Warren, D-Mass., and Cory Booker, D-N.J., demanded answers from Bed Bath & Beyond on its stock buyback and severance policies.
- The company spent billions in stock buybacks even as it headed toward bankruptcy, the lawmakers said.
- The retailer filed for bankruptcy in April and began closing stores and laying off workers.
The company, which has spent $11.8 billion in stock buybacks for its executives since 2004, is "failing to treat retail employees with dignity in the bankruptcy process," according to a letter to Bed Bath & Beyond CEO Sue Gove from Sens. Elizabeth Warren of Massachusetts and Cory Booker of New Jersey.
The lawmakers claim Bed Bath & Beyond denied some workers severance pay after it filed for bankruptcy in April and began closing stores and laying off workers. Other workers were denied 401(k) matches for contributions after receiving misleading guidelines, the letter states.
The failed big box store also announced layoffs of 1,295 employees a day before an April 10 New Jersey law went into effect, effectively dodging the law that provides enhanced protections to laid-off workers, the letter claims. The company later reversed course after public pressure and issued one week of severance for every year worked to those affected employees.
Bed Bath & Beyond did not immediately return request for comment on the lawmakers' letter.
For several years, Bed Bath's business had been crumbling as it failed to adapt to the rise of e-commerce and keep up with competitors like Amazon. As the retailer reported sagging sales and announced plans to close stores and cut workers, it took on more debt to buy back stock in a bid to boost its share price.
A record $230 million in buybacks was purchased over three months at the beginning of 2022, only months before store closures and layoffs began.
"As a result, the workers who ran your business, staffed your retail stores, and fulfilled online orders are being forced to shoulder the brunt of the losses, while shareholders and some executives walk away unscathed," the lawmakers wrote.
Warren, a member of the Senate Banking Committee, and Booker asked Bed Bath & Beyond to commit to providing severance to its workers and for detailed information on its severance policy, stock buybacks and dividends and other related issues. The Democrats asked for a response by July 19.