Corporate Misconduct Case Study: Microchip Technology Inc. & Its Impact on Former Atmel Employees

TL;DR: Following its acquisition of Atmel Corporation, Microchip Technology Inc. is alleged to have systematically denied promised severance benefits to around 200 terminated employees. Microchip Technology presented workers with offers significantly lower than what was stipulated in a pre-merger benefits plan, requiring them to sign away their legal rights to receive even this reduced amount. This case highlights a corporate strategy that allegedly leveraged misinformation and fiduciary power to slash employee compensation for its own financial gain, leaving workers stripped of the security they were explicitly promised.

Continue reading to understand the full scope of the allegations and the systemic issues at play.

Table of Contents

1. Introduction: A Promise Broken
2. Inside the Allegations: A Bait-and-Switch on Employee Benefits
3. Timeline of Alleged Misconduct
4. Regulatory Capture & Loopholes: Exploiting ERISA for Profit
5. Profit-Maximization at All Costs: A Calculated Betrayal
6. The Economic Fallout: Financial Hardship by Design
7. Environmental & Public Health Risks
8. Exploitation of Workers: The Human Cost of a Merger
9. Community Impact: Eroding Trust in Corporate America
10. The PR Machine: The Language of Resolution
11. Wealth Disparity & Corporate Greed: A Familiar Story
12. Corporate Accountability Fails the Public: The Fight for a Fair Hearing
13. Pathways for Reform & Consumer Advocacy
14. This Is the System Working as Intended
15. Conclusion: A Case Study in Systemic Failure
16. Frivolous or Serious Lawsuit?

Introduction: A Promise Broken

In the world of corporate mergers, promises made to employees are often the first casualty of the deal. For the employees of Atmel Corporation, this reality hit with devastating force. Before being acquired, Atmel created a benefits plan governed by the Employee Retirement Income Security Act (ERISA), a federal law designed to protect workers’ retirement and welfare funds.

The plan was explicitly created to “ease concerns” among staff, promising significant cash severance if an acquiring company terminated them.

That promise was shattered. Soon after Microchip Technology Inc. acquired Atmel, it terminated longtime employees Peter Schuman and William Coplin without cause. It then offered them severance packages substantially lower than what the plan guaranteed, conditioning the payment on their signing a release of all potential legal claims.

This act of corporate maneuvering became the centerpiece of a class-action lawsuit filed on behalf of approximately 200 former Atmel employees who found themselves in the same predicament, their promised financial cushion pulled out from under them at a moment of profound vulnerability.

Inside the Allegations: A Bait-and-Switch on Employee Benefits

The core of the legal battle revolves around Microchip’s alleged breach of its duties as a fiduciary—a position of trust that legally required it to act solely in the best interests of the employees.

Schuman and Coplin allege that Microchip engaged in a calculated campaign of misinformation. Microchip Technology informed the terminated Atmel employees that the benefits plan had expired, a claim the employees contend Microchip knew or should have known was false.

Evidence suggests that before the merger was finalized, Atmel’s own human resources department, in a document reviewed and approved by Microchip, circulated a “Frequently Asked Questions” paper assuring employees that Microchip would honor the Atmel plan.

An Atmel HR executive had also specifically told employees that the plan would cover terminations connected to an acquisition by “Dialog or Microchip.” These assurances stand in steep contrast to Microchip’s actions post-merger, painting a picture of deliberate deception designed to save Microchip Technology money at the direct expense of its newly acquired workforce.

The letters accompanying the reduced severance offers framed the payment as a way “to resolve any current disagreement or misunderstanding regarding severance benefits.”

This language itself suggests an awareness of the discrepancy between what was promised and what was being offered. By presenting the lower amount as a resolution, Microchip created a high-pressure situation where terminated employees, facing unemployment, were pushed to accept a fraction of their entitled benefits in exchange for signing away their right to sue for the full amount.

Timeline of Alleged Misconduct

Date	Event
September 2015	Atmel Corporation and Dialog Semiconductor agree to a merger, triggering the conditions of a pre-existing employee severance plan.
Pre-November 1, 2015	An “Initial Triggering Event” for the Atmel severance plan occurs, ensuring the plan remains in effect for 18 months.
January 2016	Microchip Technology Inc. outbids Dialog and agrees to acquire Atmel.
Post-January 2016	Atmel’s HR department, with Microchip’s alleged approval, circulates a document assuring employees Microchip will honor the severance plan.
April 2016	Microchip’s acquisition of Atmel officially closes.
Post-April 2016	Microchip terminates former Atmel employees, including Peter Schuman and William Coplin, without cause.
Post-April 2016	Microchip informs terminated employees the severance plan has expired and offers them significantly lower benefits in exchange for signing a release of all claims.
Post-Termination	Approximately 200 former Atmel employees sign the releases and accept the reduced severance packages.
Post-Termination	Schuman and Coplin file a class-action lawsuit against Microchip, alleging violations of ERISA and challenging the enforceability of the releases.

Regulatory Capture & Loopholes: Exploiting ERISA for Profit

This case is a distressing illustration of how laws designed to protect workers can be twisted to serve corporate interests. ERISA was enacted to establish standards of conduct for fiduciaries and provide employees with “ready access to the Federal courts.” Yet, Microchip’s strategy appears to have relied on creating legal and informational barriers that made it difficult for employees to understand or assert their rights. By misrepresenting the status of the benefits plan, Microchip Technology exploited the inherent information asymmetry between an employer and its employees.

The very act of seeking a release of claims under these circumstances represents a systemic failure. Under neoliberal capitalism, the legal framework often favors corporate actors who can afford extensive legal teams to navigate and exploit complexities in the law. A terminated employee, facing the sudden loss of income, is hardly on equal footing. Microchip’s actions highlight how a company can use its position of power and its role as a fiduciary to extract concessions from vulnerable individuals, turning a protective statute like ERISA into a tool for limiting liability.

The legal system itself enables this behavior through its slow and deliberate pace. By forcing employees into a lengthy court battle simply to determine the enforceability of the releases they signed under duress, the system rewards corporate delay tactics. This procedural warfare drains the resources and resolve of individual plaintiffs, a strategic advantage for corporations that late-stage capitalism implicitly encourages.

Profit-Maximization at All Costs: A Calculated Betrayal

The decision to deny the full severance benefits appears to be a classic example of profit-maximization overriding ethical and legal obligations. The potential savings from underpaying 200 employees would be substantial, directly boosting the bottom line of the newly merged entity. This behavior is not an anomaly but a predictable outcome of a capitalist system that incentivizes shareholder value above all else.

The communications from Microchip and Atmel leading up to the final acquisition suggest a calculated strategy. Assurances that the plan would be honored can be seen as a way to maintain employee morale and ensure a smooth transition during the critical merger period. Once the acquisition was complete and the employees were no longer needed, Microchip Technology’s stance allegedly shifted, revealing a prioritization of cost-cutting over its prior commitments.

This approach reflects a deeply ingrained tenet of neoliberal corporate strategy: treat labor as a cost to be minimized, not as a group of stakeholders with legitimate interests. The severance plan was an explicit promise, a contractual and fiduciary obligation. The alleged decision to breach that promise demonstrates a corporate ethos where financial targets eclipse duties of loyalty and fair dealing.

The Economic Fallout: Financial Hardship by Design

For the approximately 200 former Atmel employees, the consequences were direct and severe. The “significant cash severance” they were promised was meant to be a financial bridge, a safety net to help them transition to new employment after being terminated without cause. By offering a “significantly lower” amount, Microchip directly contributed to the financial instability of these workers and their families.

In our economic system where household debt is at an all-time high and a single unexpected job loss can lead to foreclosure or bankruptcy, the denial of promised severance is a devastating blow. The actions alleged in this case created a manufactured economic crisis for hundreds of families, transferring wealth that was promised to them back to the corporation.

This form of economic harm ripples outward. When a large group of workers in a community simultaneously face financial distress, it can strain local economies and social services. It is an enlightening reminder that corporate decisions made in boardrooms in Phoenix or San Francisco have tangible, negative consequences for communities across the country.

Exploitation of Workers: The Human Cost of a Merger

The core of this case is the alleged exploitation of workers. The employees at Atmel were given assurances about their financial security to “ease concerns” during a period of corporate uncertainty. This was a strategic move to ensure stability during the merger process. The subsequent refusal to honor those promises transforms the employees from valued team members into disposable assets.

The demand that employees sign a release of all legal claims to receive even the diminished severance payment is a particularly coercive tactic.

It placed workers in an impossible position: accept a fraction of what they were owed and forfeit their rights, or reject the offer and receive nothing while embarking on a costly and uncertain legal fight against a multi-billion dollar corporation. This is economic coercion.

This case epitomizes how, under late-stage capitalism, workers are often viewed as liabilities on a balance sheet. Their loyalty, experience, and well-being are secondary to the financial mechanics of a merger. The system incentivizes companies to extract as much value as possible from their workforce while minimizing their obligations, a dynamic that leaves workers profoundly vulnerable.

Community Impact: Eroding Trust in Corporate America

While the primary victims are the former Atmel employees, the impact of such corporate behavior extends to the broader community. Every instance where a major corporation is seen to break its promises erodes public trust. It reinforces a narrative of corporate greed and impunity, where legal and ethical obligations are mere suggestions, easily discarded when they conflict with profit motives.

This erosion of trust has significant societal costs. It breeds cynicism and discourages faith in economic institutions. When employees see that even a legally binding benefits plan, protected by federal law, can be challenged or ignored, it sends a chilling message about the precarity of work in modern America.

Furthermore, it damages the corporate sector’s reputation as a whole. While Microchip’s actions are specific to this case, they reflect a pattern of behavior that the public has come to associate with large corporations. This contributes to a social fabric frayed by inequality and a sense that the system is rigged in favor of the powerful.

The PR Machine: The Language of Resolution

The language used by Microchip in its communications with terminated employees is a masterclass in corporate spin. The letter accompanying the diminished offer stated that it was being made “in part to resolve any current disagreement or misunderstanding.” This phrasing subtly shifts the blame onto the employees, framing their expectation of the promised benefits as a “misunderstanding” rather than a legitimate claim.

This is not the language of a fiduciary acting in the “solely in the interest of the participants and beneficiaries.” It is the language of risk management and legal maneuvering. The goal is to create a narrative that justifies the company’s actions and pressures the employee into compliance, all under the guise of resolving a dispute.

The “Frequently Asked Questions” document, allegedly approved by Microchip before the merger, served a different PR function. It was designed to pacify and reassure, to keep the workforce stable and productive until the deal was done. The subsequent reversal of this position reveals the tactical, and ultimately disposable, nature of such corporate communications.

Wealth Disparity & Corporate Greed: A Familiar Story

This case is a microcosm of the broader trends of wealth disparity and corporate greed that define our current economic era. A corporate acquisition, which often generates immense wealth for executives and shareholders, was allegedly financed in part by denying promised compensation to rank-and-file employees. This is a direct transfer of wealth from workers to capital.

The amounts in question—”significant cash severance”—were life-changing for the employees but likely a rounding error on Microchip’s corporate balance sheet. The decision to fight over these sums, rather than honor the commitment, speaks volumes about a corporate culture fixated on maximizing every dollar of profit, regardless of the human cost.

In an economy where CEO pay has skyrocketed while worker wages have stagnated, the actions alleged in Schuman v. Microchip are not surprising. They are the logical outcome of a system that relentlessly prioritizes shareholder returns and executive bonuses over the financial security of the employees who create the value in the first place.

Corporate Accountability Fails the Public: The Fight for a Fair Hearing

The legal journey of the former Atmel employees reveals a system where corporate accountability is not a given, but a hard-won battle. The district court initially granted summary judgment against the named plaintiffs, Peter Schuman and William Coplin, effectively validating the releases they signed. This initial ruling was based on a narrow, six-factor legal test that failed to formally consider evidence of Microchip’s alleged breach of its fiduciary duties.

This outcome demonstrates a significant failure of the system to provide “ready access to the Federal courts” for employees challenging powerful corporate fiduciaries. The plaintiffs were forced to appeal to the Ninth Circuit simply to argue for the application of a legal standard that takes a fiduciary’s own misconduct into account.

This procedural hurdle bought Microchip Technology time and forced the wronged employees into a prolonged, expensive legal fight, a dynamic that heavily favors the corporation. The court system, in this instance, initially protected the outcome of a coercive transaction rather than interrogating the fairness of its creation.

Even more telling, the district court acknowledged that there was “at least one material dispute of fact regarding Defendants’ knowledge of the Plan and its intended interpretation” when it came to the non-named plaintiffs.

It also found a “genuine issue of fact material to the issue of a breach of fiduciary duty”. Despite these findings, it took a full appeal to ensure that this evidence of misconduct would be a central part of the legal test for the named plaintiffs, highlighting a system that can compartmentalize justice and fail to apply a uniform standard of accountability.

Pathways for Reform & Consumer Advocacy

The Ninth Circuit’s decision in this case offers a crucial pathway for reform in how courts handle ERISA claims. By rejecting the narrower six-factor test and adopting a more comprehensive nine-factor analysis, the court established a stronger standard for worker protection. This reformed test explicitly requires courts to consider the context of the fiduciary relationship and any abuse of that power.

The most significant element of this reform is the ninth factor: “whether the employee’s release was induced by improper conduct on the fiduciary’s part”. This single addition transforms the legal landscape for employees. It shifts the focus from a simple checklist of the employee’s sophistication and understanding to a direct examination of the employer’s behavior, ensuring that a fiduciary cannot benefit from its own wrongdoing.

For worker advocates and future plaintiffs, this nine-part test is a powerful tool. It provides a clear legal basis to introduce evidence of corporate misinformation, coercion, and bad faith directly into the evaluation of a release’s validity.

The court’s opinion that this final factor “warrants serious consideration and may weigh particularly heavily” against Microchip Technology where a breach is alleged gives significant leverage to employees fighting against corporate overreach.

This Is the System Working as Intended

From a critical perspective, the Schuman v. Microchip case is not a story of a system that failed, but one that worked exactly as designed under neoliberal capitalism.

The system’s initial response was to uphold the releases, prioritizing the finality of a contract—even one obtained under dubious circumstances—over the fundamental duties of a fiduciary. This reflects a systemic bias that protects capital and transactions over the rights of labor.

Microchip’s was able to leverage its immense resources to argue for a legal standard that conveniently ignored its own alleged misconduct, and it initially succeeded. The necessity of an appellate court intervention to correct this interpretation shows that the default posture of the legal system can be to shield corporations. The protracted, multi-year process is a feature, not a bug, designed to exhaust the resources and resolve of individuals, thereby discouraging challenges to corporate power.

The entire episode illustrates that legal protections on paper, like ERISA, are only as strong as the courts’ willingness to enforce their spirit.

Without the plaintiffs’ persistent legal challenge, the system would have legitimized a process where a fiduciary could allegedly mislead beneficiaries to save money and then use that very deception to shield itself from liability. This is the logic of late-stage capitalism in action: profit is the goal, and the legal system is a terrain to be navigated and manipulated in its pursuit.

Conclusion: A Case Study in Systemic Failure

The legal battle waged by Peter Schuman, William Coplin, and their 200 colleagues is a definitive case study in systemic failure.

It began with a clear promise of financial security made by a corporation to ease the anxieties of its workforce during a merger. That promise was allegedly broken for the sake of profit, as Microchip presented its new employees with reduced benefits and misrepresented their rights under the plan.

What followed was a not-super-positive illustration of how the American legal system, while offering an eventual path to justice, is structured in a way that favors the powerful.

The employees were forced to litigate for years, not on the merits of their claim, but simply to establish the correct legal lens through which their case should be viewed.

The Ninth Circuit’s ultimate decision to require “special scrutiny designed to prevent potential employer or fiduciary abuse” was a victory for accountability, but the arduous journey to that point underscores a profound systemic imbalance.

This case stands as a testament to the human cost of corporate greed and the immense difficulty of holding fiduciaries accountable. It reveals that foundational worker protections like ERISA are not self-enforcing and can be systematically undermined by corporations that prioritize their bottom line.

The story of the Atmel employees is a powerful reminder that without vigilant oversight and judicial willingness to scrutinize corporate conduct, the promises made to workers are easily broken.

Frivolous or Serious Lawsuit?

This lawsuit is unequivocally serious and rests on substantial legal and factual grounds. Its legitimacy is affirmed by the judicial process itself. The district court, while initially ruling against the named plaintiffs on legal grounds, still found that there was a “genuine issue of fact material to the issue of a breach of fiduciary duty” in obtaining the releases. This finding alone establishes that the core of the lawsuit is not frivolous but involves a legitimate dispute over alleged corporate misconduct.

Furthermore, the Ninth Circuit Court of Appeals validated the seriousness of the plaintiffs’ claims by reversing the lower court’s decision. The appellate court did not dismiss the case; instead, it established a more stringent, employee-protective legal test and sent the case back for the district court to re-evaluate using this new standard. An appellate court does not take such steps for a frivolous matter.

The court’s decision to adopt a new nine-part test, which explicitly includes considering “improper conduct on the fiduciary’s part,” signals that the allegations of bad faith and deception are central to the case’s resolution.

The entire appeal was predicated on the serious legal question of how to handle releases obtained by a fiduciary potentially breaching its duties, confirming the lawsuit’s critical importance in defining the boundaries of corporate accountability under federal law.

💡 Explore Corporate Misconduct by Category

Corporations harm people every day — from wage theft to pollution. Learn more by exploring key areas of injustice.

• 💀 Product Safety Violations — When companies risk lives for profit.
• 🌿 Environmental Violations — Pollution, ecological collapse, and unchecked greed.
• 💼 Labor Exploitation — Wage theft, worker abuse, and unsafe conditions.
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• 💵 Financial Fraud & Corruption — Lies, scams, and executive impunity.

NOTE:

This website is facing massive amounts of headwind trying to procure the lawsuits relating to corporate misconduct. We are being pimp-slapped by a quadruple whammy:

1. The Trump regime's reversal of the laws & regulations meant to protect us is making it so victims are no longer filing lawsuits for shit which was previously illegal.
2. Donald Trump's defunding of regulatory agencies led to the frequency of enforcement actions severely decreasing. What's more, the quality of the enforcement actions has also plummeted.
3. The GOP's insistence on cutting the healthcare funding for millions of Americans in order to give their billionaire donors additional tax cuts has recently shut the government down. This government shut down has also impacted the aforementioned defunded agencies capabilities to crack down on evil-doers. Donald Trump has since threatened to make these agency shutdowns permanent on account of them being "democrat agencies".
4. My access to the LexisNexis legal research platform got revoked. This isn't related to Trump or anything, but it still hurt as I'm being forced to scrounge around public sources to find legal documents now. Sadge.

All four of these factors are severely limiting my ability to access stories of corporate misconduct.

Due to this, I have temporarily decreased the amount of articles published everyday from 5 down to 3, and I will also be publishing articles from previous years as I was fortunate enough to download a butt load of EPA documents back in 2022 and 2023 to make YouTube videos with.... This also means that you'll be seeing many more environmental violation stories going forward :3

Thank you for your attention to this matter,

Aleeia (owner and publisher of www.evilcorporations.com)

Also, can we talk about how ICE has a $170 billion annual budget, while the EPA-- which protects the air we breathe and water we drink-- barely clocks $4 billion? Just something to think about....