In the last few months, I’ve had some inquiries from employers asking about resources for layoffs.

Yawn.

Everyone remembers the layoffs of the recession, right?

Actually no, as it turns out.

In the ten years since the last great round of layoffs, there is a big group of new managers, directors, human resource personnel, lawyers etc that have joined the workforce.  And, as it turns out, they really DON’T remember the layoffs.  Unemployment is low. “Why would I need to worry about a Reduction in Force?

The stock market’s drop yesterday should remind all of us that good times aren’t always going to last.

What’s ironic about this is that back in 2008 — when the unemployment rate was skyrocketing — programs about reductions in force were just taking off and I noted the same concerns about whether employers were sufficiently aware of the issues.

History may repeat itself. Back then, I highlighted a few items that employers had to think about:

  • The WARN Act – If you’re doing a mass layoff, you need to notice affected workers in advance and provide notices to local and state officials.
  • Separation Agreements – If you want employees to sign a separation agreement (and you probably should), you need to give employees who are terminated in a layoff 45 days to consider an agreement and provide additional background information about the layoff itself.
  • Disparate Impact Analysis – With computers, checking your layoff data to ensure that it doesn’t have a disproportionate impact on protected groups (or, if it does, a legitimate business reason why it might) remains important.

Much of this remains valuable advice today.  And for employers who don’t remember this, now would be a good time to start your refresher courses.

Layoffs may not be right around the corner. But employers that are looking ahead in their business plans for 2019, would be wise to ensure that their staff are aware of the obligations that attach if the economy turns cold.

Suppose you have to terminate an employee who is over the age of 40 and you decide to offer that employee a separation agreement.

(I’ve previously covered the “standard” provisions in an agreement here and discussed a 2009 EEOC Guidance on the subject here.)

You already know (right?) that releases for employees over 40 need to comply with the Older Workers Benefit Protection Act.  Among the requirements: that you provide those terminated employees with at least 21 days (or 45 days in the case of a reduction in force) to consider the agreement.

But suppose the employee comes back to you and negotiates for some additional severance or some significant change to the agreement and you, as the company, agree to make that change.   What happens to the 21 day (or 45 day) period?

Interestingly, the EEOC has addressed this in a little known regulation.  Under the EEOC’s view, a “material change” to the agreement restarts the consideration period; thus it’s the employer’s final offer that matters in figuring out when the 21 day (or 45 day) period runs.

The regulation (29 C.F.R. § 1655.22(e)(4)), states the following:

The 21 or 45 day period runs from the date of the employer’s final offer. Material changes to the final offer restart the running of the 21 or 45 day period; changes made to the final offer that are not material do not restart the running of the 21 or 45 day period. The parties may agree that changes, whether material or immaterial, do not restart the running of the 21 or 45 day period.

So, note the last sentence: the employer and employee can agree to a shortened period of time.

The result for employers? Consider putting into your agreements a provision that if there have changes to the agreement (material or immaterial), the employee agrees that this does not restart the consideration period.

Otherwise, you may find yourself on the other side of an argument that the release was not OWBPA-compliant.