Staff Reductions: the Last Resort Part 2

This article reviews best practices for when employee lay-offs are unavoidable.

Legal commentators speculate that 2009 will see an increase in litigation arising out of reductions in force ("RIF") cases. Generally, this is because RIF cases involve plaintiffs who are often more sympathetic than other employment law litigants.

The key to limiting liability associated with RIF cases is planning. Planning which employees will be impacted by a layoff should be managed carefully and not rushed, even when top management is demanding immediate action. A timeline with realistic expectations should be developed and followed closely.

Also, employers should avoid viewing a RIF as the opportunity to get rid of the "bad apples" or poor performers. Employers who do decide to lay-off employees based on poor performance, should do so only if they have documented issues beforehand. In other words, an employer's failure to document performance issues and/or efforts to give "poor performing" employees satisfactory written performance reviews or salary increases risk exposing their companies to wrongful termination, discrimination, and retaliation suits.

There are a number of concerns that should be weighed prior to reducing one's labor force. A few of these concerns have been highlighted below.

Worker Adjustment and Retraining Notification Act (WARN) (Federal): Requires employees with 100 employees or more to provide 60 days notice in the case of a mass layoff.

California's adoption of the WARN requires 60 days notice for employers with 75 or more employees.

Older Worker's Protection Act (OWBPA): requires special language and timelines when presenting an employee who is 40 years of age or older with a severance and release agreement.

Federal and State anti-discrimination and anti-retaliation regulations.

Federal and State wage & hour and final pay regulations.

California's adoption of the WARN requires 60 days notice for employers with 75 or more employees.

Due to the complicated nature and maze of regulations, employers should work closely with human resources professionals.

About the Author:
Michele O'Donnell joined the MMC team in January 2007 and currently leads MMC's elite team of HR Consultants. Ms. O'Donnell has been involved in the Human Resources industry for more than 14 years, bringing vast training and management experience to the MMC leadership ranks. Her experience spans the broad scope of labor law, regulatory compliance and HR Best Practices, drawn from her rich experience as Director of HR for several firms throughout her career. She currently works to ensure that MMC's consultants forge long lasting relationships with our clients, fostered in exceptional service and unsurpassed HR expertise. Ms. O'Donnell earned her baccalaureate degree in Business Administration from Auburn University before receiving her Masters degree in Human Resource Management from Troy State University.

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