Workforce Redesign: Expert Counsel for Your Restructuring Compliance

A role restructuring initiative that eliminates, consolidates, or significantly modifies employee positions must be designed with careful attention to the legal obligations that apply to each affected employee, and the employer must document the business justification for each position elimination, ensure that the selection criteria are neutral and non-discriminatory, and provide affected employees with the notices and information required by applicable law. The most legally vulnerable workforce redesign decisions are those that are made without a documented business rationale or implemented in a manner that creates the appearance of pretext for discrimination against protected groups.

Corporate restructuring and federal employment law counsel can advise on the specific role restructuring and department reorganization requirements and develop the workforce redesign implementation and employment law compliance strategy.

A reduction in force requires the employer to identify the positions to be eliminated, determine the selection criteria for identifying the employees whose positions will be eliminated, and assess whether the application of those criteria has a disparate impact on any protected class before the layoff is implemented. An employer that discovers that its selection criteria disproportionately affect employees who are members of a protected class must either modify the selection criteria to reduce the disparate impact or document its compelling business justification for the criteria.

Labor and employee rights and labor laws counsel can advise on the specific workforce redesign legal framework and develop the comprehensive workforce restructuring compliance and layoff risk management strategy.

Reductions in force (RIF) and employee misclassification counsel can advise on the specific headcount reduction and workforce reallocation requirements and develop the RIF implementation and employee reclassification compliance strategy.

A terminated employee who believes that her position was eliminated for reasons other than the legitimate business justification offered by the employer can file a wrongful termination claim on theories including breach of an express or implied employment contract, violation of public policy, discrimination on the basis of a protected characteristic, or retaliation for engaging in protected activity, and a company that conducts a large-scale workforce reduction without conducting a disparate impact analysis is significantly more vulnerable to claims alleging that the layoff was a pretext for discrimination. An employer that receives a charge of discrimination in connection with a workforce reduction should immediately preserve all relevant documents related to the workforce redesign process.

Wrongful termination and workplace discrimination counsel can advise on the specific wrongful termination and discrimination claim risks and develop the wrongful termination defense and discrimination claim risk management strategy.

The WARN Act requires employers with one hundred or more employees to provide sixty calendar days advance written notice to affected workers, state dislocated worker units, and local government officials before a plant closing or mass layoff, and an employer that fails to provide the required notice is liable to each affected employee for back pay and benefits for each day of the violation up to sixty days, plus civil penalties of up to five hundred dollars per day. Many states have enacted mini-WARN laws that impose more stringent notice requirements, including shorter employee thresholds, longer notice periods, and broader definitions of covered employment actions.

Wrongful termination lawsuit and age discrimination counsel can advise on the specific mass layoff compliance failure and workforce reduction legal risks and develop the WARN Act compliance and mass layoff legal risk defense strategy.

The federal WARN Act requires an employer to provide at least sixty days advance written notice of a qualifying plant closing or mass layoff to each affected employee, the state dislocated worker unit, and the chief elected official of the unit of local government in which the employment site is located. A qualifying plant closing is a shutdown of an employment site affecting fifty or more employees and a qualifying mass layoff is a workforce reduction affecting at least five hundred employees, or fifty to four hundred ninety-nine employees constituting at least thirty-three percent of the employer's full-time workforce, and the WARN Act provides limited exceptions for unforeseeable business circumstances, natural disasters, and faltering companies.

Workplace retaliation and whistleblower counsel can advise on the specific WARN Act notice obligation requirements and develop the WARN Act compliance and notification procedure implementation strategy.

The Age Discrimination in Employment Act prohibits employers with twenty or more employees from selecting employees for a reduction in force on the basis of their age, and the Older Workers Benefit Protection Act requires employers to provide employees who are forty years of age or older with detailed information about the positions eliminated and the selection criteria used, the ages and titles of the employees selected and not selected, and an extended consideration period before signing a severance agreement that includes a release of ADEA claims. Title VII, the ADA, and analogous state and local anti-discrimination laws require employers to ensure that their RIF selection criteria are neutral and non-discriminatory.

Equal employment opportunity and employee benefits counsel can advise on the specific employee rights and anti-discrimination protection requirements and develop the employee rights compliance and anti-discrimination protection strategy.

A legally compliant severance plan must be designed to satisfy the requirements of ERISA if the plan constitutes an employee welfare benefit plan, and a severance agreement that asks the employee to release discrimination claims must satisfy the specific requirements of the Older Workers Benefit Protection Act, including the requirement that the release be signed knowingly and voluntarily, that the employee receive adequate consideration in exchange for the release, and that the employee be given sufficient time to consider and revoke the agreement. An employer that establishes clear, objective, and consistently applied selection criteria, documents the business justification for each position elimination, and provides the required notices is in a significantly stronger position to defend against wrongful termination and discrimination claims.

Wrongful termination consultation and wrongful termination case counsel can advise on the specific layoff plan and severance arrangement compliance requirements and develop the compliant layoff and severance plan design and implementation strategy.

Legal counsel can assist the employer in designing a workforce redesign process that minimizes legal risk by reviewing the proposed selection criteria for potential disparate impact issues before the layoff is implemented, advising on the scope of the WARN Act and applicable state mini-WARN law notice obligations, preparing the required written notices, reviewing the proposed severance agreement for compliance with the Older Workers Benefit Protection Act, and advising on the employer's obligations to continue benefits and honor existing contractual commitments. A post-implementation compliance review that identifies any corrective actions that should be taken and documents the employer's good faith compliance efforts can significantly strengthen the employer's position if litigation is filed.

Compliance audit and internal investigation services counsel can advise on the specific litigation risk minimization and legal oversight requirements and develop the workforce redesign litigation risk management and legal oversight strategy.