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What is Avoidable Cost?
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<p>If Amtrak's management negotiated reasonable contracts with the labor unions, they probably contain a severance clause that guarantees union employees who cannot be reassigned to another like kind of job some or all of their pay for a period of time. Anything beyond two or three years would be extreme. However, without access to the terms of Amtrak's labor contracts, the severance terms are not known. </p> <p>In the case of long service employees who are within XX years of normal retirement, the contracts may include provisions for bridge financing of compensation and benefits until the employee qualifies for full retirement benefits. This is a practice followed by many if not most companies. Irrespective of whether the company's employees belong to a union, the day of just cutting people loose, i.e. treating them unfairly, at least by well managed companies, is over.</p> <p>The costs associated with helping long service employees over the retirement line could be classified as unavoidable. But unless one has access to the company's books, labor contracts, management discussions, etc., none of this is knowable by outsiders. </p>
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