It's that time of year again' the days are shorter, the temperature colder. In the world of outdoor construction, layoff season is upon us. For industry veterans, winter layoffs are nothing new. Some employees even welcome the holiday break. Others, however, see an opportunity to claim retaliatory discharge, no matter what the circumstance.
What can an employer do to fend off unsubstantiated retaliation claims?
- Decide why layoffs are necessary. Has demand for work declined? If so, by how much? What is the projected production outlook for the foreseeable future? Must staff be reduced to balance the budget? If yes, by how much? Whatever the reason, the employer should document its specific rationale and thought process justifying the need for layoffs.
- Specify selection criteria that can be used consistently and objectively. Again, document the criteria and include information about how the criteria will be applied. For example, will decisions be made on the basis of productivity, attendance, seniority, quality, or some mix of those factors? If a mix, which factors will be given the greatest weight?
- Beware of basing layoff decisions on undocumented performance issues or manager perceptions of "problem" employees. From an outsider's perspective, lack of documentation suggests that an issue never materialized or wasn't important enough to consider during layoff season. Similarly, subjective manager perceptions are vulnerable to claims of illegal discrimination. Therefore, remind managers to always document performance issues as they occur and ensure that a copy is saved in the employee's personnel file. Once the issue is documented, it can be used as a factor in the layoff decision.
- If entire positions are to be eliminated (as opposed to merely laying off the employee), document the objective reasons why the job functions are obsolete or should be consolidated with other positions. Be careful here, especially if positions are covered by a collective bargaining agreement ("CBA"). Be sure to follow any procedures for elimination of covered positions or persons.
- Review the layoff list for red flags. After selecting the employees to be laid off and before announcing any decision, check for patterns. For example, are all the employees on the list over the age of 40? Are all the employees on the list members of a particular protected class? Have any of the employees on the list exercised work-related rights, i.e., taken FMLA/OFLA leave, filed workers' compensation claims, or filed OSHA safety complaints? Have they expressed to management any concerns regarding any aspect of the working relationship (wages, overtime, etc.)? If you discover such patterns, you should discuss your selection with a competent employment-law attorney before implementing any final decision. Even if the decision is defensible it might have the appearance of a discriminatory or retaliatory employment action.
- Provide the affected employees with complete and factual information. When the layoff decision has been announced, be sure to provide any other required notices and to give details about continuation of benefits and to recall, if any.
- Strictly comply with all Oregon wage and hour laws. When the layoff occurs, be sure to compensate employees for all base wages, vacation, overtime, commission, etc., in accordance with Oregon wage and hour laws. It is better to err on the side of paying too much than too little because wage claims can include recovery of the wages not paid, plus a penalty equivalent of up to 30 days' wages times the hourly rate, plus attorney fees. This can be a very costly mistake.
Employers who carefully approach and document their layoff processes will reduce their potential liability for discrimination and retaliation claims. By documenting every stage and providing supporting reasons for each decision, the process can be defended in an administrative or judicial setting. As always, competent employment counsel can be an employer's best ally when working through the layoff process.
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