WORKPLACE LAYOFFS « Law Offices of Timothy Bowles | Top Employment Law Firm in Los Angeles


Employer Precautions

There is very little more precious to an individual than his or her employment. For management and personnel directors facing poor economic times, there is probably very little more difficult than ending a productive worker’s relationship when the company simply can no longer afford to carry that position.

Handling that final meeting with a departing employee can be a manager’s diplomatic challenge akin to negotiating the end of a marriage or other major international conflict.  Faced with the intense personal pride a person commonly derives from gainful employment, managers can fumble a layoff by either being too personal with —  or too coldly removed from — the outgoing employee  in the transition.

Where the manager fails to walk the fine line of credibly conveying the economic realities that have forced the layoff decision while appropriately acknowledging the departing individual’s worth, that manager may be deeply motivating that worker to find some ground, any ground,  for a large legal claim to “get even.”

Layoffs of a significant percentage of a company’s workforce raise the stakes and probability that one or more suits may follow suit.  For example, law firm Seyfarth Shaw’s 2009 Annual Workplace Class Action Litigation Report found that the 2008 financial meltdown caused a sharp jump in workplace class action litigation, especially age discrimination and Worker Adjustment and Retraining Notification (WARN) Act claims.  (WARN is a federal law applicable to companies with 100 or more employees, requiring minimum advance notice and other opportunities to workers slated for layoff.)

It is thus important for a company planning to lay off any number of employees to take effective precautions that should limit potential wrongful termination and discrimination claims.  These include:

Document a Methodology for Selection: Management should establish a sensible and consistent system for business-based selection of individuals to be let go.  Guidelines that seek to balance seniority with objective indicators of employee performance are a common approach.

Develop a Viable System for Performance Appraisals: Management should thus create and consistently conduct performance evaluations that are as objective and impartial as possible.  See also, “Grading Employee Performance ”  A company that has been able to compile such evaluations is almost certainly better equipped to deal with the difficult selection process of who must go in the event of a significant business downturn.

Maintain Accurate and Relevant Job Descriptions:  A system for performance evaluation will have limited value unless accompanied by thorough, updated, and clearly stated descriptions of the duties, prerogatives and required products/results for each position in the company.   Layoff decisions based on relative, objectively evaluated proficiency in each person’s well-defined post should be very difficult to challenge as unlawfully discriminatory against a particular gender, ethnicity, age, etc.  Such criteria are of course also useful in hiring, compensation and promotions.

Experienced labor counsel can provide further valuable guidance on the often delicate task of company layoffs.


Photo: Dorthea Lange, 1932