Counsel to Counsel - September 2008 - (Page 26) in the spotlight ©iStockphoto.com/Alex Slobodkin StrAIGHt tAlk: clarity, early warning Head off downsizing woes By Steven Andersen e mployers took 1,626 mass layoff actions in the month of May, affecting more than 171,000 workers, according to the Department of Labor’s Bureau of Labor Statistics. Those numbers show a sharp rise when compared to previous months, and when compared to the same month in previous years. The message is clear: “We are seeing the largest reduction in work force since the early 1990s,” says W. Randolph Loftis Jr., managing member of the employment law firm Constangy, Brooks & Smith, LLC. The combined effects of the credit crunch and energy crisis are finally reaching workers in the trenches. The auto manufacturing, construction, retail and finance sectors are hardest hit, but companies across the board are feeling the pinch. No one relishes conducting layoffs, but one problem can create another if employers are not careful. A poorly handled downsizing can lead to individual Equal Employment Opportunity Commission claims or worse. “We’re already seeing class action lawsuits from people who have been laid off,” says Michael S. Lavenant, partner at Landegger, Baron & Lavenant. But reducing your work force doesn’t have to be a nightmare. With proper planning and execution, a downsizing plan can work for both the company and its employees. Each company must honestly assess its situation, and keep in mind that its liability profile may shift from state to state. In California, for example, meal period violations are the No. 1 claims in wage and hour class actions. There, non-exempt employees are entitled to a 30-minute meal period if they work more than six hours a day. If they don’t take the break in the first five hours of their shift, they may be entitled to an additional hour of compensation at their regular rate of pay. A very recent California Court of Appeals decision, Brinker Restaurant, puts the standards concerning management ensuring that employees are provided all meal and rest periods in flux, but definitely eases employer obligations. If the case is upheld by the California Supreme Court or not appealed, it would greatly minimize these types of claims and lawsuits altogether. However, since these types of claims can survive for three years in California, it is a Assess Your Liability “The first thing you have to do is look at any liability you may have from employment practices in the past,” Lavenant explains. “When people are steadily employed, they’re happy. They usually aren’t looking to file a claim.” But that can change fast if they are suddenly laid off. Employees who previously chose not to rock the boat about a hostile work environment, sexual harassment or unpaid overtime can quickly become motivated and dangerous plaintiffs if they feel they’ve been treated poorly. 26 LexisNexis® Martindale-Hubbell® http://www.iStockphoto.com/Alex
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