Professional Advice for Ohio Companies Considering Layoffs, Downsizing, and Closures
Proactive counsel in Cleveland, helping companies reduce their workforce
As competition expands, regulations persist, and problems with the economy endure, many companies need to reduce their workforce. Companies must comply with federal and state laws that are designed to protect workers. Employees may be entitled to advance notice based on their employment contract, collective bargaining agreements, the WARN Act, or other laws.
At Gertsburg Licata, our Cleveland labor lawyers understand which federal and state laws apply to layoffs and work reductions. We work with companies in advance to explain the laws and to develop methods and procedures for giving employees the notices they are required to have and to cover their ability to continue their health insurance. We counsel companies who need to prove that the terminations were not due to improper causes, such as discrimination or retaliation.
Applicable work-force reduction laws and statutes
Companies often have to reduce their workforce for legitimate business reasons, such as lost profits, competition, the need to change the types of products and services being offered, or decreased customer demand. Before giving a worker a pink slip, though, business owners and operators should understand their legal obligations. Some of the laws that apply to workplace reductions are:
- The Worker Adjustment and Retraining Notification (WARN) Act. This law requires that employers who have 100 or more employees give at least 60 days written notice of a plant closing or a mass layoff. The advance notice requirement is aimed at giving workers time to look for new employment or to obtain the additional training needed to get a new type of job. The WARN Act covers managers and supervisors as well as salaried and hourly employees. There are exceptions to the WARN Act that our lawyers review with the companies we counsel. Some of the exceptions include:
- Workers who are on strike
- Workers who understood at the time they were hired that employment would be temporary
- Federal, state, and local government employees
- Less than 50 workers will be affected
- If the layoff is for six months or less
- Layoffs due to a natural disaster
- Layoffs due to unforeseen business circumstances
- When there is a reasonable belief that a 60-day advance notice might affect the company’s ability to obtain new capital.
- Discrimination statutes. Some laws, such as the Age Discrimination in Employment Act and whistleblower acts, preclude firing of certain protected groups or protect workers from retaliation due to discrimination.
- Family and Medical Leave Act (FMLA). The FMLA protects workers who take qualified, unpaid leave from being fired from their job during their leave period, unless it can be shown that their termination is due to factors other than their leave.
- Workers’ compensation. Injured workers cannot be fired while they are recovering from their injuries unless it can be shown the firing is due to non-related reasons.
As part of our General Counsel services, Gertsburg Licata advises companies on keeping the proper records and documentation to prove that firings were for legitimate causes.
Employers also need to be aware of their health insurance obligations under the Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA requires that employers, only those employers with 20 or more employees, who have health insurance plans for their employees continue the health coverage group rates after a layoff for up to 18 months if the employee cannot reasonably obtain other insurance. The COBRA law has specific requirements that must be met and Ohio has its own law on continuation coverage that apply to a broader scope of employer.
Speak with an experienced Cleveland labor lawyer today
At Gertsburg Licata, our lawyers have served as in-house counsel, as well as outside counsel. We understand business needs, including the need to lay off workers and reduce staffs at times. Our labor lawyers help companies comply with the applicable laws to reduce the likelihood of being sued. If employees do bring claims, our proactive steps and effective counsel can often lead to a dismissal of the complaint, a settlement, or a favorable verdict. For help with layoff issues, please contact us at 216-573-6000 or fill out our contact form to schedule an appointment.