Take Proper Care with Layoffs

With the economy spiraling downwards, many companies have chosen to layoff staff in an effort to reduce costs or to streamline operations. Layoffs raise a number of legal issues that make it imprudent to simply let an employee go without forethought.

1. If you plan on offering an employee severance, you must consider that if the offer differs between similarly situated employees (either offered in the past or at the same time), you may run afoul of the federal employment discrimination laws. You must be mindful of laying off persons in protected classes, such as race, religion, disability, national origin, or sex. If you offer a lesser severance to an employee in a protected class, you may be facing an EEOC discrimination charge.

2. Severance agreements must comply with certain laws and contain certain disclosures in order to be legally enforceable. This is particularly true when you are offering severance to an employee over the age of 40. The Older Workers' Benefit Protection Act which is contained within the Age Discrimination in Employment Act, contains certain requirements that mandate an employee be able to make a "knowing and voluntary waiver" if the severance is in exchange for giving up any claims against the company that the employee might have.

3. If you are closing an entire facility or laying off a group of employees, you may be required to give 60 days notice prior to the layoffs under WARN Act.

4. If you have laid off employees based on "least best" performers, you should have solid documentation to support the reasons why the employee was a low performer. If you have not maintained documentation on performance, you will have difficulty in challenging an unemployment claim or in justifying why you laid a certain employee off over another (which again, may get into a discrimination claim).

Too Many Americans Feel Workplace Discrimination

According to a recent FindLaw survey, more than one in four Americans has been discriminated against at their place of employment.

If that figure is accurate, it's way too high. I used to represent individuals in employment law matters. I made the transition over to the management side many years ago due to a variety of reasons, including:

• Amendments to the Civil Rights laws resulted in few plaintiff's cases successfully surviving summary judgment;
• Because of defense success on summary judgment, settlement value (and offers to settle) were reduced or reserved until after the ruling on the motion for summary judgment;
• Most of the cases I saw arose out of some one's "bad day at work", which was a symptom of a larger problem: employers did a poor job of bridging the communication gap between rank-and-file employees and management. Most employees were unhappy because they had no outlet to aggrieve concerns, so instead of complaining to management, they were seeking out attorneys.

I realized that what I was doing had limited societal utility; I was "leveraging" cases to the point of settlement, but the problem was not being solved with the communication gap in the workplace. So, I started transitioning to the management side with an emphasis on preventing workplace disputes before they arose. Put another way, if I can educate clients on how to properly run a workplace, on what employees' rights and responsibilities are, then I've preventing a "bad day at work" and in the process helped with the great good.

So, given my goals and practice focus, it disturbs me that so many people still feel victimized at their workplace. It shows that we still have a long way to go with training and educating employers on best practices in the workplace.