Oct. 20, 2008 — In these tough economic times and job market, employers faced with making layoffs may need some legal advice. To avoid a lawsuit following a layoffs, labor and employment law attorneys at Rutter Hobbs & Davidoff Inc. offer the following tips:
Outplacement services — Employers can go a long way toward increasing goodwill with just-released employees by offering to help them find alternative work. Providing some type of outplacement assistance can do more than keep things amicable among former employees and minimize the risk of future litigation; it can also alleviate fears among current employees who may be worried about their own job security.
Plant closures or mass layoffs — Many employers aren’t familiar with the federal WARN Act, which requires covered employers to give 60 days advance notice before ordering a plant closing or mass layoff that will affect a substantial number of workers. Covered employers generally include those with at least 100 full-time employees. There are severe monetary sanctions for failing to comply with the requirements of WARN.
Discriminatory layoffs — It is important to review decisions about who will be laid off, and who will be retained, to avoid claims of discrimination in the layoff selection process. This includes a review of the impact of the layoff on employees in certain age, gender, racial, ethnic and other protected categories, as well as making sure that the company has a cogent business justification for its determinations as to who will be included in the layoff, and who will not.
Potential for retaliation and other claims — A careful review by human resources and legal counsel will help to ensure that any decision to layoff staff will be supported by legitimate business reasons, closing the door on potential lawsuits stemming from claims of retaliation. There is also a risk with a layoff that the employees will be prompted to pursue other claims, such as class actions for wage and hour violations seeking, for example, payment of unpaid overtime or compensation for meal and rest period violations.
Specific requirements for agreements involving older workers –— The federal Older Workers’ Benefit Protection Act places certain important restrictions on separation agreements or severance packages involving employees who are 40 or more years old, including those involved in group layoffs (defined broadly to include layoffs of two or more employees at one time). To ensure that a layoff does not violate this act, employers should consult with an employment law attorney to make sure they have the proper language for any agreements with laid off employees over 40. This includes a required chart listing ages and positions within the affected department of the company noting those included and not included in the layoff.
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