Layoffs/Reductions in Force

You tell us that after years of dedicated service, your employer tells you that it has to cut back. There will be a lay off, a so-called “reduction in force.” They give you a severance agreement, and ask you to sign away your rights.

When your employer plans to lay off a lot of workers, they often do planning to minimize their possible liability. As a first line of defense, your employer may try to offer a voluntary separation program. This means they will not tell you that you are fired, but will offer you a “bonus” to leave the workplace, hoping that you will see the handwriting on the wall. If are given an incentive to leave, rather than being told to leave, the employer will protect itself from employment claims if you accept the incentive. The downside of an incentive program for the your employer is that it cannot know how many will accept and they won’t be able to decide who is going to stay on. Thus, employers often opt for involuntary programs - firings.

In deciding who to fire, your employer tries to develop criteria that can insulate it from legal challenges. For example, in the case of sales people, those who have generated less revenue would be let go. The criteria that an employer uses must be applied fairly to all similarly situated employees. And you will want to know if they have documented their decisions properly. 

However, it may be that the “fair” layoff standards used by the employer are in fact having a disproportionate and discriminatory effect on certain groups of employees. Since employers are frequently trying to get rid of older employees, the “objective” layoff criteria may turn out to have a disparate impact on older employees, resulting in age discrimination. The employer cannot select employees for layoffs based on discriminatory reasons.

For those over 40 years old, the Older Workers Protection Act mandates that you get useful information about whom your employer has selected for layoff. Your employer has to tell you, in any severance agreement which contains a release of your claims, the job titles and the ages of employees who are going to be laid off and the same information for those who are going to be retained. This can be very useful in trying to determine whether your employer is trying to pick off older employees.

In addition, regardless of whether or not the layoff is discriminatory, there are situations where your employer is required to give you advance notice of the layoff, rather than come to your desk without notice to escort you out of the building. Advance notice scenarios are covered under the Federal and New York State WARN Act. The New York State WARN Act is more favorable to employees, requiring longer periods of notice.

The severance package that you are offered may also be subject to ERISA. If your employer has a written plan or demonstrable policy of offering a certain amount of severance to employees who are laid off through no fault of their own (for example, one week per year up to a certain number of years), then that a formula must be applied to your severance package.

You should have a New York City employment review the agreement and the circumstances of your separation from your job. You may have vested benefits that need to be preserved, and you may have been unfairly selected in a discriminatory manner or illegal manner.

In our 25 years of experience in employment, we have helped many employees who have been illegally been selected for a lay off or reduction in force.

Contact us online or call us at (212) 949-1001 for a free initial consultation today to see whether your rights have been violated in connection with a lay off or reduction in force.