LAWFUEL – Legal Newswire (NY Law Journal)
By Jonathan Stoler and James R. Hays
Work force reductions are among the more unpleasant events employers and their counsel may endure. Such employment actions typically have an emotional and economic impact on employees, require the observance of a myriad of complex laws, and usually require an enormous amount of work in order to properly plan and execute.
In recognition of these realities, this article is intended to assist in identifying key issues to consider when planning a work force reduction and to suggest several “best practices” that can help your company plan for, communicate and implement such an action in a humane fashion that will reduce the risk of lawsuits.
In most cases, the reasons an organization is placed in the unenviable position of having to engage in a work force reduction are external – the unexpected loss of a key client or customer, an unanticipated drop in demand for the company’s products or services or a sudden domestic or overseas event affecting industries in general. Although the reasons may differ, virtually every work force reduction requires that companies consider various alternatives, develop a strategy for identifying affected employees and undertake preventive legal analysis.
Thoughtful planning of a work force reduction can help to ensure that a company is in compliance with applicable laws and may take some of the “sting” out of this employment action. Indeed, when the affected employees understand the reasons for the work force reduction and believe that they were treated with dignity (as opposed to a fungible commodity), they may exit their employment with a heightened degree of respect for how the company handled this unpleasant event. This, in turn, may reduce the risk of lawsuits.
