Managing in a Downturn Without Getting Sued
The Bureau of Labor Statistics announced last week that employers cut 159,000 jobs in September, more than double the cuts in August or July and the biggest slash in five years. The worst part? The data was gathered before the “bailout” mess, which could drive even deeper cuts.
As discussed previously here on the Blawg, employment lawsuits tend to go up the more the economy goes down. Here’s what you can do to avoid winding up on the wrong side of the law.
Don’t Forget to WARN. The Worker Adjustment and Retraining Notification Act (WARN) requires advance notice of a “plant closing” or “mass layoff” in certain situations. Click here for our handy WARN Cheat Sheet. Also, make sure you’re familiar with your own state’s laws. Some states have enacted WARN-type statutes and/or require advance layoff notice under unemployment regulations.
If You RIF, RIF Right. To withstand judicial scrutiny, a RIF must be based on legitimate nondiscriminatory business reasons. Make sure all RIF decision-makers can clearly articulate those reasons before you proceed. Also, the criteria used for selecting RIF participants should be as specific, concrete and consistent as possible. Multiple factors may be used, but the more subjectivity there is, the more likely it is that potentially discriminatory factors could creep in.
Severance and Release. Consider offering severance agreements in exchange for releases of claims to further reduce risk. Make sure you comply with the older worker waiver protections under the law. Check out our our ADEA Cheat Sheet for an overview.
Talk to Your Lawyer. Run the RIF plan by your legal counsel and conduct discrimination testing to make sure everything’s on solid legal footing.
