A reduction in force (RIF) is an onerous course of action no employer wants to undertake. Unfortunately, reducing the number of workers you employ is sometimes necessary due to economic factors, industry changes, organizational restructuring or other reasons. It takes meticulous attention to detail to ensure a smooth transition for employees being let go, those who remain, and the business itself. Preventing California wrongful termination claims should be top of mind as business leaders plan and implement a RIF.
Mitigating Risk While Reducing Your Workforce
When planning and implementing a reduction in force, California employers must ensure compliance with local, state and federal laws. This requires careful evaluation and documentation of the factors necessitating the changes, criteria for employees selected for release and the details of implementation and reorganization. Taking proactive steps to plan and follow reduction-in-force best practices can help California employers reduce the risk of wrongful termination claims resulting from employee separations.
Planning for a Reduction in Force in California
Successfully implementing a reduction in force requires careful planning. First, you need to identify the team members who will manage the process and make decisions. Confidentiality is critical during the early stages of the process, so the team should only include those whose input and involvement are valuable and necessary.
Next, the team should clearly and accurately identify and document the reasons the RIF is needed and how it is expected to benefit the company, its remaining employees and its customers or clients. These goals should guide and support the development of objective criteria for selecting the employees to be released.
Considerations for selection might include seniority, experience, qualifications, performance, skills and the anticipated impacts on the business of specific separations. In establishing the selection criteria, it is important that the team consider whether employees in protected classes will be disproportionately affected. Even with the purest of motives, the appearance of disparate impact on protected class employees can easily lead to litigation. Any existing employment and/or labor union contracts should also be reviewed to avoid conflicts with the terms of those agreements.
The details of any separation packages should also be determined and documented during the RIF planning process. Will the terminated employees receive severance or other benefits? If severance is being offered, employers might be able to use separation agreements that include a release of legal claims. If used, these agreements must be structured in accordance with applicable laws and regulations to ensure enforceability.
Finally, a plan should be laid out for the notification of employees, including how and when affected and remaining employees will be notified and protocols for questions or disputes.
Compliance with Laws Governing Reduction in Force
The California Worker Adjustment and Retraining Act (Cal/WARN Act) requires covered employers to give written notice 60 days in advance to employees affected by a layoff of 50 or more employees within a 30-day period. Notice of relocation of operations more than 100 miles away or closure of a facility also require this advance notice.
California employment laws also require the employer to notify the Employment Development Department, the local workforce investment board, and the chief elected officials of cities and counties where layoffs or terminations will occur. Employee and other notifications must include the elements required by the federal WARN Act.
In addition to maintaining compliance with the Cal/WARN and federal WARN Acts, employers should review and ensure the reduction in force and related activities are implemented in accordance with other laws, including the Age Discrimination in Employment Act (ADEA), the Older Workers Benefit Protection Act (OWBPA) and the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA).
Preventing California Wrongful Termination Claims During RIF Implementation
The designated parties should draft, review and distribute clear, accurate and legally compliant notices to all required parties. Communicating the news compassionately and thoughtfully is beneficial both to employees being released and those remaining with the company.
Before the notices are distributed, appropriate training should be provided to help managers prepare for and deal with a RIF. This training should provide resources regarding appropriate and consistent messaging, as well as defining when a question or matter should be referred by the manager to the human resources or legal departments.
Finally, employers must ensure timely and proper payment of final wages, accrued benefit balances and any other compensation to which an employee may be entitled.
Consult with a California Wrongful Termination Defense Lawyer
The best path to preventing California wrongful termination claims related to a reduction in force is to conduct the RIF carefully, following all applicable laws and regulations. As a California wrongful termination defense lawyer, Susan A. Rodriguez understands the complex legal environment and pitfalls associated with reductions in force. She helps businesses plan and implement these reductions properly to mitigate the risks of associated claims. You may contact Susan at the Law Offices of Susan A. Rodriguez, APC by calling (323) 272-3954 or completing the law firm’s online contact form.
Posted by Susan A. Rodriguez, Esq.
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