Practice Areas & Industries: Baker, Donelson, Bearman, Caldwell & Berkowitz, PC

Practice/Industry Group Overview

In tough economic times, many employers are faced with having to reduce their workforce to meet financial challenges. Reductions in force can occasionally lead to complicated and unnecessary litigation, at a significant and unexpected cost to the company. Employers must comply with federal, state and sometimes even local laws and regulations. If a severance package is to be offered to employees in return for release of potential claims, the complex requirements of the Older Workers Benefit Protection Act must be followed. And if the employer has 100 or more employees (fewer under certain state laws), the federal WARN Act may be implicated, requiring an employer to give 60 days' written notice of the layoff to selected employees, as well as state and local government officials, and where appropriate, the employees’ bargaining agent. Other laws, such as ERISA, COBRA, those relating to discrimination, employee benefits, tax, bankruptcy, the Fair Labor Standards Act and the National Labor Relations Act could also be impacted in a reduction in force.

• Advise companies how to analyze, structure and select employees for layoff;
• Advise companies how to avoid and mitigate claims for discrimination that can arise out of a reduction in force;
• Advise companies on executive and white collar layoffs, severance packages, non-compete agreements and strategies;
• Prepare confidential severance agreements and release of claims and notices that comply with the Older Workers Benefit Protection Act and other laws;
• Provide advice concerning the WARN Act and similar state and local plant closings laws and those relating to mass layoffs;
• Provide advice on ERISA, COBRA and employee benefits issues which often arise in a layoff especially under the recently enacted stimulus bill;
• Counsel employers on the National Labor Relations Act and any applicable collective bargaining agreement addressing the reduction in force;
• Advise on bankruptcy matters, as appropriate;
• Counsel on federal and state wage and hour laws; and
• Defend the company in any resulting litigation, including discrimination claims, collective actions and class actions.

We understand that employees are a company's most important asset, and a reduction in force can be fraught with turmoil.  Our labor and employment attorneys can help employers and their H.R. professionals navigate the complicated road toward a succesful reduction in force.