As the economy continues to falter, jobless claims continue to rise. Employers considering terminating employees, job cuts, reduction in force, plant closings or mass layoffs should be aware of certain employee rights and potential risks involved with employment terminations. Employers should be aware of the heightened risk of liability the present economic climate presents, and should have legal counsel prepare or review all correspondence or documentation related to the termination of the employees.
Severance Agreement & Mutual Release of Claims
As part of any employee termination or mass layoff, it is critical that the employer prepare and execute a severance agreement with the terminated employee in which the employee releases all claims against the employer (such as claims for wrongful termination or discrimination). It is often necessary that the release of claims, or settlement agreement, contain a mutual release of claims in which both the employer and employee release all claims against each other. It is important that such agreements are carefully drafted to ensure that they are enforceable and cover all possible claims. Our employment attorneys can prepare, review and negotiate severance packages including termination letters, settlement and releases of claims, and various statutory notices.
For Cause means an employee has committed a breach of the employment contract, employee guidelines or handbook published by the employer. Based on the particular fact patterns, our employment attorneys can advise you about whether you have grounds for terminating an employee for cause, and identify the risks of wrongful termination or discrimination claims if the facts and circumstances are less than certain.
Wrongful Termination and Discrimination
It is illegal for an employer to terminate an employee: for refusing to break a law; in retaliation for filing a discrimination or safety claim; for taking leave under the Family and Medical eave Act; without following the employers own stated procedure or policy; or for any for reason not contained in breach of the terms of an employment contract. So, it is critical to follow the company guidelines and procedures for providing notice of termination to the employee.
Notices and termination letters
Our attorneys can help you determine if it is necessary to issue a warning letter notifying an employee of potential future termination. Based on a review of your employee guidelines or handbook, we can help you determine the procedure for terminating employees. We can prepare the termination letter, as well as a severance and mutual release of claims agreement.
The Worker Adjustment and Retraining Notification Act (WARN) requires employers to give workers, their families and communities by requiring employers 60 days advance notice of covered plant closings and covered mass layoffs. The WARN Act notice must be given to either affected workers or their representatives (e.g., a labor union); to the State dislocated worker unit; and to the appropriate unit of local government. The WARN law generally applies to employers who have 100 or more employees.
Even as some job cuts may be necessary, we understand that company morale and employee retention remain critical to the ongoing success of your business. We can help you craft your corporate communications to clearly express your commitment to the continued success of your business operations, as well as your hopes, goals and expectations for your company personnel. Through clear, well crafted internal and public communications, we can help you control the message about your company's viability and direction, and reduce risks of misunderstanding or claims of discrimination based on imprecise communications.
To speak to an employment attorney about the proper procedures for mass layoffs or individual employee terminations or preparing a severance agreement for one or more employees, please contact us here or call 713.650.9700.