Labor law attorneys Lewis Silverman, Robert Heiferman and Michael Heckle.
Layoffs have never been a cakewalk.
How an employer handles the situation can lead to a more pleasant parting of the ways and fewer headaches down the road if handled correctly.
New laws that have taken or may take effect on a state and national level were discussed by attorneys Robert Heiferman, Lewis Silverman and Michael Heckle of Jackson Lewis L.L.P., based in White Plains. The four-hour seminar was sponsored by Orange County”™s Chamber of Commerce and SHRM-Mid-Hudson Valley chapter (www.shrm.org) May 13 at the Ramada Inn in Newburgh.
Tough economic times have made it even tougher for employers to make payroll, offer benefits packages and give “extras” employees had, in the past, enjoyed. Many are cutting back hours, benefit contributions and other perks in order to keep doors open.
While Silverman reminded his audience that no company is legally obliged to give severance pay, “It pays to use common sense when terminating a long-term employee. But go into the termination process with your eyes wide open.”Â
Employers should expect to be brief, direct and firm as to the company”™s decision. They should also explain recall-rehire rights, if any; severance benefits, if any; and outplacement or other transitional services, if available.
The lawyers advised employees to have at least two team members in the room when an employee is being terminated, saying, “There is going to be shock, surprise and inability to absorb the information … it”™s important to remember we are dealing with human being here.”
There are certain obligations employers must meet if faced with laying off an employee: access to file information kept on the employee, as well partial payment of the employees COBRA benefits (new federal legislation calls for employers to pay 65 percent of COBRA for terminated employees).
Jackson-Lewis lawyers also recommended a letter of recommendation is more than welcome for the employee losing a position; obtaining a release, signed by both parties, is preferable from the employers”™ standpoint. Heiferman cautioned employers to make sure the employee signs the release first, saying it will reduce the chance of an employee coming back and suing for discrimination, particularly if the employee being let go is an older one.
“There is no ”˜cookie-cutter”™ or Blumberg form when it comes to a release,” said Heckle. “Each one must be specifically tailored to the individual employee,what you have agreed to. They also have a 21-day window to consider or to revoke the release if they choose to.”
Heiferman advised employers to incorporate a paragraph in the release advising the person that if they are going to revoke the release, “they must notify the employee in writing, certified mail and direct that letter to a specific person.”
When it comes to giving large severance packages, Heiferman advises employers to let the employee bring it up first and then if an amount is agreed to, stagger the payments.
“People who get a lump sum will quickly go through it, and then panic sets in; they may be under a lot of stress and not plan wisely. By giving the severance pay over a period of time, perhaps three to six months, you increase the likelihood that person will move with their lives.” Silverman reminded listeners that releases “must list all the statutes the employee is waiving.”
The legal team addressed the change to the National Labor Relations Act of 1935, which was the basis of the formation of many unions after the Great Depression. The changes made to the wording are crafted into legislation called the Employee Free Choice Act. “There”™s a significant reason to re-visit this legislation,” said Silverman. “Since Arlen Specter went from the Republican to the Democratic Party, and although he says he does not support EFCA, the Senate now has the 60 votes needed to stop a filibuster. Since President Obama has indicated he intends to sign this legislation, it will drastically change the face of the labor market.”
Hekle said one of the rationales behind changing the current law is because supporters say elections need to be improved. “Under EFCA, if 51 percent of your employees sign cards, your place of business becomes a union; it eliminates a secret ballot. Employers may end up with a union even where a significant number of employees may not have signed off to OK it.”
Under current law, say the attorneys, employers that are unionized can still control their destinies to a degree. That will change if EFCA is passed and signed into law. “Under EFCA, however, if you can”™t agree after 90 days, a mediator is assigned for 30 days,” said Silverman. “Then if no agreement is made within that 120-day window, an arbitrator will impose the rules. He may not know the nature of your business or how it”™s run; it”™s a recipe for disaster, a third party knows nothing about your business, but will be deciding how it will be run.”
What happens if the legislation passes, said Silverman, “is anyone”™s guess. Large multistate chains will need a continual stream of communication with employees. In essence, if the legislation passes, employers should make their employees aware that by signing the card they are voting for the union, not just deciding whether to talk about it.”
“We”™ll live through this,” said Heiferman. “One way or another, the new legislation, if passed, will affect approximately 80 percent of businesses in this country. It will not affect the mom-and-pop grocery store on the corner with a single employee. But for others, who have 30-40 or more employees, it will definitely have an impact.”
