Post Termination Issues | Summary and Q&A

TL;DR

Downsizing decisions can lead to unfair labor practices and legal obligations for employers, and the implementation can be affected by the Worker Adjustment and Retraining Notification (WARN) Act.

Key Insights

• 🔬 Downsizing decisions can result in unfair labor practices charges under the NLRA.
• 🉐 Some downsizing decisions require employers to bargain with union representatives.
• 🥳 The WARN Act prohibits plant closings or mass layoffs without a 60-day notice to affected employees and officials.
• 👮 Discriminatory selection of individuals for downsizing violates employment discrimination laws.
• ⚾ Experienced employees should be offered opportunities to retain employment based on objective criteria.
• 🤕 Early retirement incentives can be offered to employees, but they must not target specific age groups.
• 🛄 Bankruptcy filing may affect employees' wages and benefit claims, with varying priorities depending on the timing.
• 🛄 Non-competition and non-solicitation agreements aim to restrict former employees' activities, but their enforcement varies across states.
• 👨‍💼 Employers should craft these agreements to protect important business interests without being overly broad.

Transcript

let's take a look at downsizing from an employment law perspective downsizing or reduction in force is used to refer to terminations that stem from employers decisions to operate with fewer or different types of staff employers regularly decide to go out of business closed facilities relocate restructure subcontract adapt new business strategy sell... Read More

Questions & Answers

Q: What are some business decisions that can result in downsizing?

Downsizing can occur when businesses decide to close facilities, relocate, restructure, subcontract, adapt new business strategies, sell business units, or merge/acquire other companies.

Q: How can downsizing decisions potentially violate the NLRA?

Downsizing decisions can be considered unfair labor practices if they interfere with employees' NLRA rights or discriminate against employees based on their union activity. Hostility towards unions during relocation of work can also violate the NLRA.

Q: What are the notification requirements under the WARN Act?

Employers covered by the WARN Act must provide a written notice to affected employees, state, and local government officials at least 60 days prior to downsizing. Employees reasonably expected to suffer employment loss are considered affected.

Q: How can employers select individuals for downsizing without violating discrimination laws?

Employers must ensure that the means of selecting individuals for downsizing are not discriminatory. Criteria for downsizing should not include age or any other protected class characteristic and should be applied consistently.

Summary & Key Takeaways

• Downsizing refers to terminating employees when employers decide to operate with fewer staff, relocate, restructure, or adapt new business strategies.

• The NLRA can be implicated in downsizing decisions, leading to unfair labor practice charges and legal obligations for employers to bargain with union representatives.

• The Worker Adjustment and Retraining Notification (WARN) Act requires employers to provide a 60-day notice to affected employees and officials before ordering plant closings or mass layoffs.