You do a blog long enough and everything comes full circle.  Back in January 2008, I took out my crystal ball and suggested that reductions in force (RIFs) and lawsuits would soon follow.

We all know what happened next. The economy crashed and discrimination claims at the EEOC peaked at their highest levels in more than 20 years.  

So here we are 11 years later.  A whole generation of HR professionals have never experienced a significant downturn.  Are we headed there again in 2019?

I’ll leave that to the economists and politicians.  Two weeks ago, the stock market was topsy-turvy. Now, we seem pre-occupied with the partial government shutdown.  And at least in Connecticut, new Governor Ned Lamont has a plan for growth, growth, growth.

But it’s worth considering whether your company is even prepared for a downturn, even if it still is many months away.

Again, we can first look to history. As I said back in 2008:

What is a reduction in force? Really, just a lawyerly way of saying “layoff”. Back in the early to mid 1990s, lots of companies went through them.  And the number of lawsuits arising from those reductions went through a major peak in 1995 or so.

But these types of lawsuits rise and fall with the economy.  When the economy is good, lawsuits go down. When it’s not so good, they go up. One reason is that when people can find another job quickly (i.e. the unemployment rate is low), then tend not to sue as much.

And even back in 2008, I noted that things might be different for employers and indeed they were.  The rise of the internet-fueled lawsuits have been a reality. Here was my prediction back then:

One more factor suggests to me that more lawsuits are on the horizon — it’s much easier for a few employees to band together than in the past. Previously, people would have to use their existing networks to find laid off employees to hear their stories (indeed, outplacement firms were a good source for employees looking to talk with other laid off workers). But now, with the rise of social networking sites, it seems only a matter of time before a group of employees will form a Facebook or MySpace page to compare experiences.  Employees from around the country can share information instantly, making it much easier to figure out if there are trends associated with the layoff that may give rise to a lawsuit.

Just as Uber or the employers in Connecticut facing class action lawsuits that one firm puts on their website have found out.

What’s an employer to do? I’ll tackle that in my next post.

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


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.

You’ve agonized over firing an employee.  You hired her over a year ago and it just isn’t working out.  The employee is kind, conscientious and punctual, but just doesn’t have the skills needed for the particular position.

But you’ve made up your mind. You’re firing her at a meeting this afternoon.

In that meeting, the employee stops you part way to say that she too has been thinking the job hasn’t been a good fit and asks if she can resign instead.

Can you still accept the employee’s resignation?

It may seem obvious, but I’ve had more than a few discussions with employers who are caught offguard with such a request.  (In some other circumstances, the employer may ask if they can allow the employee to resign in lieu of termination. Gets to the same point.)

The answer is yes, you can allow the employee to resign. Even if you originally were firing them.

There’s no law that requires employers to stick with a decision that they are having second thoughts. You can withdraw a termination, you can change the termination to a resignation. It’s really up to you and the employee.

But here’s a related question. Can the employee still collect unemployment benefits if they “resign”?

Again, the answer is yes.  Mostly.

As the Department of Labor notes, the “general  rule  is  that  a  person who  voluntarily  leaves  suitable  work without good cause attributable to the employer is not eligible for benefits.”

But an employer who indicates that it is going to fire an employee and “allows” the employee to resign, is probably establishing the “good cause to be attributable to the employer” because it relates to the wages, hours or working conditions of the job.

There are exceptions, of course, but employers who contest unemployment of an employee that they “allowed” to resign in lieu of termination, should really be thinking long and hard about such a decision.

And, as another blog post reminds, “forcing” an employee to resign isn’t going to fly in many instances either.

Firing an employee isn’t easy. It shouldn’t be. But doing it the right way isn’t that hard either.

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.