DOWNSIZING AND MASS LAYOFFS

DOWNSIZING AND MASS LAYOFFS Terminating an employee is among the most difficult tasks facing any employer. When a decision is made to lay off a significant portion of the workforce, the difficulty and the legal risks are multiplied. Particularly in tough economic times, laid-off employees will have a more difficult time finding new employment, so their incentive to sue is even greater.

QUICK TIP When an exit incentive program is made available to a class or group of employees,

coupled with a severance agreement and release, the Older Workers Benefit Protection

Act requirements may be triggered.

While the legal risks associated with a mass layoff can never be entirely eliminated, employers can take steps to reduce their expo- sure by doing the following:

• considering other cost-saving alternatives to a layoff, such as offering wage rate or hour reductions to employees

• developing and documenting the business reasons for the layoff

• focusing on positions, not people, to be eliminated • hiring an outside expert to help decide what positions to eliminate

• making sure that layoff decisions are not influenced in any way by discriminatory factors, such as race, gender, or age

• using an outside expert to review the unintended impact along race, gender, and age lines once tentative layoff decisions have been made

• offering severance packages, early retirement packages, or other exit incentives in exchange for a release of all claims

• following customary exit interviews and procedures for each individual being laid off