Without careful planning, layoffs can result in costly errors. Here is an overview of common errors some employers make when conducting layoffs and how to avoid them. This piece is the first of a three-part series on layoffs. A subsequent article will outline steps to limit potential liability for layoffs, and a third will examine Worker Adjustment and Retraining Notification (WARN) Act and state "mini-WARN" requirements.
"The losses incurred in discrimination litigation following a badly executed layoff can easily exceed the amount that was sought to be saved by implementing the layoff," said Gerald Hathaway, an attorney with Faegre Drinker in New York City.
"Whenever a company or employer has to contemplate a reduction of employees, it can be very emotional and stressful for those responsible for making the selections and the communications—and of course for those impacted," said Trina Ricketts, an attorney with Ogletree Deakins in Kansas City, Mo. No employer wants to conduct a reduction in force (RIF), because organizations understand the personal impact on their employees, she added.
"As such, the way to minimize the stress associated with such a difficult task is to have as much time as possible to analyze and plan," Ricketts said. This is especially true if a company is new to RIFs on a large scale, she added.
Common Errors
The most common error with layoffs is being oblivious to the WARN Act and the mini-WARN laws of many states, which often have stricter...
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