Layoffs and Reductions in Force: Preventing Lawsuits and Avoiding Legal Liability
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Reductions in force can increase operational efficiency - make sure to protect your company from possible legal landmines.
Businesses constantly are exploring ways to reduce operating costs and increase profit wherever possible. Sometimes, such workforce reductions are necessary and must be conducted as quickly as possible. Before any such workforce reductions occur, however, employers should have a plan in place to address the many legal risks raised by such layoffs. Employers must plan reductions in force (RIF) strategically and in compliance with applicable federal and state laws if they hope to retain the financial benefits that result from workforce reductions. Lawsuits arising out of RIFs can result in significant liability for employers that may already have financial troubles. With proper planning and advice, the potential for employment discrimination claims, employee benefit claims, employee notification claims and other employment issues can be anticipated and avoided.
AuthorsJohn J. Porta, Jackson Lewis P.C.
• Reasons for Surge in Layoffs
• Alternatives to Involuntary Layoffs May Reduce Risk of Claims
When Layoffs Are Unavoidable: Proper Planning May Reduce Risk of Employment Disputes
• Planning the RIF
• Making Key Policy Decisions - How to Select Among Employees
• Strive for an Objective Comparison of Employees Where Job Qualifications and Skills Are Considered in Making Reductions
• Prior to Implementing a RIF, Factors Militating Against the Selections of Certain Employees Should Be Considered
• Employees Affected by a Staff Reduction Should Be Advised of the RIF in as Professional and Supportive a Manner as Possible
• After the Implementation of the RIF, Remaining Employees Must Be Enlisted as Partners Committed for Future Growth
Employers Can Limit Potential Liability
• The Older Workers' Benefit Protection Act (OWBPAbpa)
• What Is Valuable Consideration?
• What Information Must Be Provided to Obtain an Enforceable Waiver?
• Can the Waiver Be Understood by the Employee Signing It?
• Relevant Time Periods
Notice Requirements Under the Worker Adjustment and Retraining Notification Act (WARN)
• Covered Employers
• Plant Closing or Mass Layoff?
• Notification Periods
• Content of Notices
• State and Local Notice Requirements