crybabyThe Connecticut Law Tribune reported earlier this month on a new Connecticut Supreme Court case that, for the first time, allowed claims brought by kids to proceed based on injuries suffered by their parents.

Plaintiffs’ lawyers have a new weapon in their arsenal. The state Supreme Court, in a split decision, has ruled that Connecticut children have the right to sue for loss of consortium in personal injury cases. Previously, only spouses were eligible to collect such damages.

The court, in overturning longtime precedent, reasoned that there was a “unique emotional attachment” between parents and children, and that the grown-ups provide “critically important services” to their offspring.

So what’s the big deal for employers? Well, in doing so, the court reversed a decision nearly twenty years ago that had everything to do with employers.  That case,  Mendillo v. Board of Education for the Town of East Haddam, involved a wrongful discharge by a former high school principal.

In that suit, there was also a claim for loss of parental consortium — in other words, were the principal’s kids entitled to compensation because of the actions of the employer impacted their relationship with their parents. As noted by the Tribune: “The principal argued that the wrongful discharge forced her to take a job much further away from home, and thus the long commute deprived her kids of her love and affection.”

The court rejected the claim in Mendillo. But now, the new decision in Campos v. Coleman suggests that such a claim is revived:

Upon reconsideration of the relevant considerations, including the five factors that this court found determinative in Mendillo, we now agree with the concurring and dissenting opinion in Mendillo that the public policy factors favoring recognition of a cause of action for loss of parental consortium outweigh those factors disfavoring recognition. More specifically, we agree that the unique emotional attachment between parents and children, the importance of ensuring the continuity of the critically important services that parents provide to their children, society’s interest in the continued development of children as contributing members of society, and the public policies in favor of compensating innocent parties and deterring wrongdoing provide compelling reasons to recognize such a cause of action.

The court does place some limits on this new claim.  First, the claim must be joined with the parent’s “negligence claim whenever possible.”  Second, the claim does not survive if there has been a settlement or an adverse judgment against the parent.  Third, the child can only claim damages for the period when the child is a minor.  The court also suggests that the claim should be limited to damages arising from injury to the parent’s life.

The court goes on to add that a fact finding reviewing this must also “consider whether the parent’s injuries were insignificant or serious and whether they were temporary or permanent”.  Those will be determined by a case-by-case basis.

Is a parent’s termination of employment that last six months enough to state a claim? This last limitation by the court suggests perhaps not.  But suppose the employee now takes a job two hours away and doesn’t see her kids as often. What then?

At a minimum, the court’s overturning of Mendillo opens the door to a whole new set of potential claims against employers for terminating employees. How big an opening the court created remains to be seen.

One of the better programs run by the Connecticut Department of Labor that gets almost zero publicity is the “Shared Work” program.  For employers, it’s a useful tool when you’re dealing with a temporary slowdown in work.

I talked about it five (!) years ago in the midst of the recession so I’m not going to rehash it here.

But here’s what’s new:

The CTDOL just released new regulations to make the program available to more employers and released a new brochure about the program as well. As the CTDOL stated in a press release this month:

As a result of recent changes to the state’s Shared Work Program, eligibility criteria for employers qualified to participate in this unemployment insurance program has expanded and now offers companies more opportunities to take part in the program and thus avoid laying off skilled workers.

The state’s Shared Work program, administered by the Connecticut Department of Labor, can provide partial unemployment benefits to employees when a company is experiencing a temporary economic downturn and wants to avoid layoffs. The goal is to retain skilled workers so companies can quickly return to full strength when the business climate has improved.

As of July 1, employers now qualify for the program when faced with the need to reduce the hours of its permanent full-time and/or part-time workforce by 10 to 60 percent. Prior to the change, companies could only qualify if work hours were reduced between 20 and 40 percent, and eligible employees were required to be full-time workers.

According to State Labor Commissioner Sharon M. Palmer, the program now allows a company to apply if it has at least two employees affected by the change in hours worked. Prior to the July 1 change, the minimum requirement for eligibility was four employees. In addition, the Labor Department will also be able to provide a dependency allowance to those employees taking part in the program that have qualifying dependents on their unemployment insurance claim.

In other words, if you were interested in the program before but didn’t think your business qualified, you may want to look at it again.

While not widespread, the program does have the involvement of over 100 employers in the state.  For more information about the program, contact your local counsel or contact the Connecticut Department of Labor.

At last night’s gubernatorial debate, the issue of potential layoffs of state union workers was a hot topic of conversation.  (See CT News Junkie for a more detailed report.) Each candidate indicated that layoffs weren’t ruled out if elected.  

That’s all very well and good, but none of them have mentioned how a prior layoff (from a governor who allegedly tried to seek long-term concessions from the unions) has led to a seven-and-a-half year battle between the state (actually, the governor & the chief of the office of policy and management) and State Employee Bargaining Agent Coalition (SEBAC). And the outcome of that case is likely to determine the path that the next governor will be able to take under similar financial circumstances. 

What’s that case about?  It has a long and tortured history, but each side has now filed motions for summary judgment (in whole or in part) that try to summarize it.  According to the unions (the summary judgment memo can be downloaded here):

The case involves the constitutionality of an attempt by Connecticut’s former Governor to compel the plaintiff unions to grant long-term concessions to their legislatively-approved collective bargaining agreements by threaten to terminate the employment of union members if the concessions were not granted and by implementing the terminations, through layoffs of 2800 union employees, when the unions refused to agree to all of the demanded contract modifications.

Defendants assert that it is constitutionally permissible for them to terminate union employment in an effort to compel demanded concessions.  Defendants further contend that in making state work force determinations, it is constitutionally permissible for them to single out union employees for layoff.  Plaintiffs submit that such conduct violates their First Amendment right to freedom of association; impermissibly conditions their right to continued public employment on giving up protected First Amendment and Contracts Clause rights; and subjects them to adverse state action based on an arbitrary and impermissible classification, in violation of the Equal Protection Clause.  

According to the state (summary judgment memo available here):

"The First Amendment is not a substitute for the national labor relations laws…(citation omitted) Notwithstanding the Supreme Court’s admonition, the Plaintiffs … seek to transform a labor dispute with the State of Connecticut (the "State") into a First Amendment "retaliation" case.  The labor dispute arose amidst a major budget crisis in 2002-2003, when the State sought concessions from the Plaintiffs. When the Plaintiffs refused to agree to the State’s demands, the state laid off approximately 2800 state employees.  …

[M]assive budget deficits have forced the State’s governors to make extraordinarily difficult decisions about the size and cost of the State work force as part of their constitutional obligation…[T]he Court should reject the Plaintiff’s attempt to ‘constitutionalize’ their labor dispute with the State.  

(Full disclosure: For 2003-2005, I was part of a team of attorneys on this matter representing the state while I was at a prior law firm.)

Just two weeks ago, each party filed briefs opposing the others’ summary judgment motions. The union’s memo is available here, while the state’s is available here.  

Notably, a decision is not expected in that case until well after the November elections. But one thing is for sure: The outcome of the case may dictate how much (or little) flexibility the next governor will have on layoffs. Indeed, ironically, the new governor will have to deal with any fallout from the years-old lawsuit.

In any event, the case should serve as a cautionary tale. Even the layoffs that do occur can lead to years of litigation and no assurances of the end result. It’s something that the candidates should keep in mind as they devise their strategies for balancing the budget.

The Connecticut Business and Industry Association takes a minute every day to share information that is relevant to businesses across the state. Of course, because that minute airs at 5:59 a.m. on WTIC-AM (1080), you may miss it from time to time.

Starting Monday, however, you’ll be able to listen to a series of interviews I did that have been taped for release this week on the CBIA’s "Business Minute".  They all discuss, in one way or another, how the economic stiuation affects employers. 

Among the topics that I discuss is severance agreements. Indeed, sometimes agreements seem to be somewhat foreign with legal requirements such as telling the employee of his or her right to consult with an attorney. (For a more detailed discussion of those requirements, see this blog post by D. Jill Pugh.) 

If 5:59 a.m. is still a bit early for you, the interviews will also be rebroadcast on several other Connecticut radio stations this week and available online here.

Employment law is quite the hot topic among various blogs. So much so that it’s time for the next installment of Quick Takes — a quick summary of what’s new and noteworthy.

And on the lighter side, don’t miss this fun post by the Delaware Employment Law Blog recapping the top 10 excuses for being late to work.

Leave it to librarians to come up with a great new resource page for learning about Connecticut’s unemployment laws.

I can hear the chuckles now. Librarians? 

Yes, librarians.

As long-time readers of the blog know, one of the best kept secret resources for attorneys and businesses are the judicial branch law libraries.  They continue to serve as a clearinghouse for lots of information that is scattered among the Internet.

The librarians latest creation is a pathfinder page on the state’s unemployment compensation laws.   Among the items of information: various resource guides from the Connecticut Department of Labor and Office of Legislative Research; links to the relevant Connecticut statutes and regulations; library materials; and useful websites.  It’s a great place to start research on the subject.

The pathfinder isn’t perfect. For example, although it links to documents helping to explain what an employee’s rights are, it doesn’t link to the DOL’s "The Employer’s Guide to Unemployment Compensation" — a must read for employers who are addressing the issue of unemployment compensation. 

The Connecticut Department of Labor also has additional information helpful to employers on its website (that isn’t listed on the pathfinder), including information on: Eligibility Requirements, Quality Control Brochure for Employers, Rapid Response Information Packet, Shared Work Program (as alternate to layoffs).

So, while the judicial branch law libraries have provided a great resource to start looking at the unemployment compensation issue, employers should also be aware of other resources out there. But it is a better place to start research than a Google search.  

Addressing the legal risks associated with a reduction in force (or "RIF") has long been a topic on this blog. In fact, looking in my crystal ball way back in January 2008, I suggested that it would the hot topic before years’ end

Flash forward to the present, and the headlines continue to be dominated by news of layoffs, plant closings, furloughs and bankruptcies. 

One of my friends and professional colleagues in the area, Lori Rittman Clark, has posted her thoughts on RIFs in the For the Defense blog

While there’s nothing particularly ground-breaking (quite simply because there aren’t a lot of new developments in the area), it is a concise and well-rounded summary for employers and HR professional looking to reduce legal risks associated with reductions in force.

What are the issues she suggests reviewing?

  • Potential Applicability of the WARN Act;
  • Disparate Impact Analysis.;
  • Disparate Treatment Analysis; and,
  • Releases.

All are sound subjects for review. The best suggestion should be the most obvious one: Seek legal guidance at the START of a process, rather than the end, to avoid the legal pitfalls that surround RIFs.

In the end, however, there is no magic bullet to eliminating legal risks associated with reductions in force. Each of the items Clark raises may help reduce the legal risks, but even implementing all of the above may not eliminate the risk entirely.

At a CBIA seminar yesterday where I spoke, several speakers discussed the challenges that exist for companies in these economic times. One CBIA economist projected that the current recession will not bottom out in Connecticut until late summer or fall 2009.

But the times also present opportunities, as well, the speakers said. Indeed, now may be the time for companies to find and recruit terrific talent that may be available in the labor market through no fault of their own.

Indeed, an article in today’s BusinessWeek suggests that for small companies, now may be a great time to make such an investment.

Still, despite the overall gloomy forecasts, the downturn also presents hiring opportunities for small businesses. For starters, there is a huge wealth of talented applicants in search of work at the moment. "If you want to hire someone today, it is like buying a car or house," says [one economist]. "Employees are cheap, good, and readily available. Nobody is complaining about the quality of applicants. The choices you have now are much improved." … "If you are a buyer of labor, this is a buyer’s market."

The major job cuts at large corporations also translates into a boon for small business owners who have the resources to hire workers who were perhaps unattainable previously. In November, the Computing Technology Industry Assn., an information technology trade group based in Oakbrook Terrace, Ill., published a survey that showed that 85% of the 772 small- and medium-size businesses in the U.S., Canada, and Britain that it questioned planned to hire new employees within the next 12 months. And in a slight shift away from the deluge of dreary numbers, SurePayroll, the Glenview (Ill.) payroll administrator that tracks small-business hiring trends, reported in November that 214 small businesses that participated in its survey increased their hiring by 0.26% to 3.3%, year-to-date.

Of course, there is a word of caution as well.  If employers are laying off staff for "financial reasons" and then hiring new staff to fill those positions, it will have some explaining to do. On the other hand, if the company wants to shed some of its poorest performers (and tells them that their employment is terminated for performance-related reasons) and cherry-pick from the talent available, now may be a good time to do so.

For anyone who watched 60 Minutes last night, you know that there is a great deal of pessimism out there about how quickly this recession will end.

Employers are struggling to control costs and keep layoffs to a minimum. A new, thoughful article by the Wharton school suggests that employers be innovative in their approaches to dealing with this economic crisis.

[Wharton Professor Peter] Cappelli suggests that it’s worth thinking about what kind of problem a company is trying to solve. If there is a concern about what happens when business activity picks back up, for example, companies that hold on to their workers would be in much better shape than companies that have undergone large-scale layoffs.

The costs of layoffs go beyond the morale problems they cause — both for those laid off and those who keep their jobs. Unemployment insurance premiums spike. Depending on the company, there are severance packages to consider and outplacement services (costly in these days of bigger demand for them). Litigation is a not insignificant risk. Cappelli suggests that if a company can cut back without instituting layoffs, it should do so. "Then you don’t have those start-up costs" once things are back on track.

On the other hand, there’s nothing like a good economic downturn to get rid of dead wood. A sagging economy can be an opportune time for management to deal with performance problems by using the bluntest instrument possible, Cappelli says. Firing people is often difficult to execute, but an over-arching justification tends to lessen complications.

The subject of alternatives to layoffs is almost always seen from the point of view of the employer, he adds. It would be a rare employee who suggests his or her hours be cut. But executives can share the decision by asking for voluntary pay cuts in exchange for some sort of deferred compensation, such as shares of stock or extra vacation.

In giving my presentation tomorrow on the subject of RIFs, the article’s points are timely.  Layoffs are never easy and coming up with solutions to lessen the impact may make the company stronger in the long-term. 

Ultimately, if company does decide to conduct a round of layoffs, making sure that it has considered alternatives will only strengthen the company’s rationale for the layoff (thereby preserving a valuable legal defense).

With all the talk about layoffs, separation agreements have moved front-and-center to the discussion on how companies can reduce their liability exposure.

But how much severance should a company offer to its employees when laying them off?

There is, of course, no set rule in Connecticut — or the United States — on how much severance is warranted under the circumstances. But one study released last week suggests some benchmarks.  (H/T to Pennsylvania Labor & Employment Blog and Compensation Force).

The survey, by Right Management, found that U.S. employees typically earn the following amounts of severance (which represents mean weeks of severpublic domain - from wikipedia common imagesance for each year of service)

Voluntarily Separated:

  • Top Executives – 2.76
  • Senior Executives – 2.23
  • Department Heads/Managers – 1.55
  • Professional/Technical – 1.39
  • All other employees – 1.23

Involuntarily Separated:

  • Top Executives – 3.04
  • Senior Executives – 2.49
  • Department Heads/Managers – 1.78
  • Professional/Technical – 1.60
  • All other employees – 1.44

In advising employers, several seem to have adopted the one week or two weeks per year of service formula.  But in doing so, the employers provide the severance only in exchange for a full release of claims by the departing employee. 

Just be sure that when setting up the release, that you comply with the various rules associated with such agreements, including the OWBPA.