Plant Closures, Reductions in Force and Mass Layoffs

Closing a plant or laying off a large number of workers causes operational concerns as well as concern for employees impacted by the reduction.  In addition to these business and emotional concerns, workforce reductions present a number of legal issues that must be addressed, including possible bargaining obligations, collective bargaining agreement restrictions, National Labor Relations Act concerns and additional obligations under state laws.

An employer’s failure to properly plan for and implement workforce reductions can result in liability.  For example, the federal Worker Adjustment and Retraining Notification Act (the WARN Act) requires employers to provide employees impacted by certain “mass layoffs” and plant closings with 60-days, advanced notice of the event or they can be held liable for the employees’ wages for a period up to an additional 60 days following the event.  In large plant closings and layoffs, this can add up to millions of dollars.

The criteria used by employers to select employees for layoff must also not run afoul of the prohibitions against unlawful discrimination found in both federal and state laws.  Employers may also need to carefully analyze selection decisions to avoid discrimination claims including discriminatory impact claims.

Does your company’s layoff constitute a “mass layoff” under federal law?  Does your company’s plant closure require the provision of notice?  What kind of notice is required?  Are there bargaining obligations?  Is your company’s layoff criteria, neutral on its face, unlawful because it has a disproportionate impact on older workers?
These are the types of questions the labor and employment lawyers at Taft have guided employers through over the years.