When Ed Orgeron, Louisiana State University’s former head football coach, walked away with a $17 million job buyout, he didn’t expect his ex-wife would claim half of it as a marital asset in their divorce. But that’s exactly what happened, and now the Louisiana Supreme Court has agreed she was entitled to over $8 million.
This case raises a key question for anyone facing divorce: Is a job buyout, severance package, or work bonus considered marital or separate property? In New Jersey, the answer often depends on timing, intent, and how the payout was earned.
Let’s take a deeper look.
What Happened in the Ed Orgeron Divorce Case?
In 2020, Orgeron signed a contract extension with LSU that guaranteed him a $17 million buyout if he were terminated without cause. Just over a month later, his wife Kelly filed for divorce. When LSU fired Orgeron in 2021, he collected the buyout—and tried to argue it was his separate property.
But the Louisiana Supreme Court didn’t agree. Because the contract was signed while the couple was still married, the court ruled the buyout was part of their community property and Kelly was entitled to half.
Why This Matters for Job Buyouts and Divorce in New Jersey
New Jersey follows the principle of equitable distribution, not community property, but the idea is similar. If an asset was earned during the marriage, it’s likely subject to division, even if the payment comes later.
That includes job-related compensation like:
- Employment contract buyouts
- Severance packages
- Performance work bonuses
- Deferred compensation
- Stock options and equity awards
Is a Job Buyout, Bonus or Severance Package Marital Property in New Jersey?
In many cases, yes. These types of compensation packages may be considered marital property if:
- The employment agreement was negotiated or signed during the marriage
- The package compensates for past work or loyalty during the marriage
- The spouse’s career was supported by the other spouse during the marriage
Courts will examine when the buyout or other compensation was earned and what it was intended to compensate. Even if a payout occurs after the divorce is filed, it could still be split if it reflects efforts or agreements that took place during the duration of the marriage. For example, a couple files for divorce in December 2025. In March 2026, one spouse receives a work bonus that reflects work completed in 2025. That bonus is almost certainly marital property subject to division.
Protecting Yourself When a Job Buyout Is Involved
If you or your spouse are expecting a job buyout, severance, bonus or any kind of major compensation, it’s essential to address it during the divorce process. Here’s how:
- Get a clear understanding of all employment agreements, including future compensation clauses. Has your spouse received work bonuses in previous years?
- Work with your divorce attorney to determine if the payout should be classified as marital or separate property
- Negotiate specific terms in your divorce settlement to avoid future disputes over buyouts or bonuses
The Ed Orgeron ruling is an important reminder: just because a job buyout is received after the date of filing doesn’t mean it’s off the table in divorce. In New Jersey, courts look at the bigger picture, including when the payout was earned, what it represents, and whether both spouses contributed to the earning power behind it.
If you’re facing divorce and wondering whether a job buyout, severance, or bonus could be divided, don’t leave it to chance. A knowledgeable family law attorney can help you protect your interests and ensure a fair outcome.
Have questions about dividing employment compensation in divorce? Contact us today at 888-888-0919 to schedule a confidential consultation with one of our family law specialists.
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