Michigan House votes to limit state severance deals

May 5, 2021

Michigan Capitol Building
Credit Michigan Senate / www.senate.michigan.gov

The Michigan House voted unanimously Tuesday to curb the size of severance deals for state officials unless they limit the state’s legal exposure and details are made public.

The move curbing the size of severance deals came after Democratic Gov. Gretchen Whitmer’s administration faced scrutiny over $85,000 and $155,000 payouts made to her former health and unemployment directors.

Under legislation sent to the Senate, state employees would be limited to 12 weeks of severance pay unless the attorney general determines a higher payment “is necessary to serve the best interests of this state based on the risk of litigation and the need to minimize the expenditure of public funds.” A separation contract would also, to the extent allowed by law, have to shield the state from a potential lawsuit.

Public officers — lawmakers, other elected state officials and appointees — could not receive severance pay unless it would contain legal costs and bar a lawsuit.

Such agreements could not prohibit officers and employees from disclosing factual information about an alleged violation of law, the existence of the contract or the full text of the deal. Any agreement that pays six weeks or more of severance would be posted on the state or legislative websites within 28 days.