Reductions In Force

1. Reductions In Force Freeman Mathis & Gary, LLP 100 Galleria Parkway Suite 1600 Atlanta, GA 30339 www.fmglaw.com

2. National Employment Discrimination Information

3. Total National Charges • 82,792 discrimination charges in 2007 • Highest since 2002

4. 2008 Georgia Employment Statistics

5. LAY OFF LEGAL ISSUES • WARN • State Plant Closing Laws • CBAs • Disparate Treatment Claims • Age • Age Impact • Disability

6. LAY OFF LEGAL ISSUES • Race, National Origin • Gender • OWBPA • FMLA

7. REDUCTIONS IN FORCE Prima Facie Case • Protected class • Qualified for position • Adverse action • Evidence sufficient to create inference

8. FOURTH FACTOR ISSUES • Replacement by younger employee • More favorable treatment of younger employee • Comparably qualified younger persons retained or “other evidence”

9. FOURTH FACTOR ISSUES • “Additional showing” of age discrimination • Age more likely the reason

10. DISPARATE TREATMENT • Direct evidence v. • Stray remarks • proves discrimination • unrelated to decision at issue • decision maker • probative and attitude

11. PRETEXT ISSUES • Employer articulates reason • Pretext plus • Articulated reason is untrue • Affirmative evidence of discrimination • Same actor defense • Inference • Strong presumptive evidence • evidence

12. PRETEXT ISSUES • Time between hire and termination • Past hiring practices • Composition of pool

13. EASY RIFS • Close Facility • Eliminate Department or Product Line • Declare Bankruptcy

14. RIFS THAT CAUSE TROUBLE • One job elimination • Job eliminations within Department • Across the board job eliminations

15. EXPLAIN REASON FOR RIF IN WRITING • Employer has experienced 10% loss of sales in last 3 months • Employer is not meeting targeted profit objectives • Employer expenses above target • Explain Group to be affected

16. REDUCE CRITERIA FOR SELECTION TO WRITING • Entire Facility or Department • Seniority • Skill Level • Past Evaluations • Special Evaluation or Rating for RIF

17. REDUCE CRITERIA FOR SELECTION TO WRITING • Circumstances for Single Job Elimination • Explain why employee selected • Explain why others not selected

18. JUSTIFYING SUBJECTIVE DECISIONS • Objectify factors to extent possible • Skill level • Productivity (profit, sales, units) • Past performance ratings

19. JUSTIFYING SUBJECTIVE DECISIONS • Be specific about subjective decisions • Versatility (document capabilities) • Promotion potential (set out target date) • Attitude (give examples) • Job knowledge (specify capability)

20. JUSTIFYING SUBJECTIVE DECISIONS • Explain exceptions to criteria for RIF • Document basis for each person

21. CONSIDER ALTERNATIVES • Reduced work week • Work sharing • Voluntary leaves of absence • Exit incentive programs

22. ANALYZE THE DEMOGRAPHICS • Maintain the privilege • Evaluate eligible pool and resulting terminations • Race • Sex • Age • Numbers are important but most times not solely determinative

23. WAYS TO HELP LAID-OFF EMPLOYEES AND BUILD GOOD WILL • Write a memo and inform employees • Thank you letters for services rendered • Have EAP representative and UE reps meet with employees • Provide a workshop in HR for resume help

24. WAYS TO HELP LAID-OFF EMPLOYEES AND BUILD GOOD WILL • Provide classifieds to employees • Compile a resume book • Solicit vacancy announcements from other employers • Organize workshops on interview skills, resume, mock interviews and other skills

25. WAYS TO HELP LAID-OFF EMPLOYEES AND BUILD GOOD WILL • Sponsor a job fair • Conduct focus group interviews

26. WARN • Worker Adjustment and Retraining Notification Act (WARN) • Enacted in 1988 • Purpose: Provide notice of large-scale loss of employment

27. WARN COVERAGE • Private Employers • Non and For-Profit • Governmental Entities Excluded • Employers with 100 or more employees (excluding part-time), or • Employers with 100 or more employees (including part-time) who work 4,000 hours per week (including overtime)

28. WARN COVERAGE Exclusions • Calculation excludes • employees who worked less than 6 months in the last 12 months • Part-time employees – works 20 hours or less per week

29. WARN COVERAGE • What about parents and subsidiaries – are their employees included? • Factors: • Common ownership • Common officers and directors • Same policies and procedures • Dependency of operations

30. WARN NOTICE • 60 days advance notice of “plant closing” or “mass layoff” • Must be in writing

31. WARN NOTICE • Notice to: • bargaining rep. • unrepresented workers • State Dislocated Workers Unit • Chief elected official of unit of local gov’t where employment loss occurs • NOTE: Part-timers and 6 month employees are entitled to notice

32. PLANT CLOSING • Close one or more facilities OR operating unit within a single site of employment • Example: HQ Campus/Industrial Park • Resulting in an “employment loss” of 50 or more employees within 30 day period • Must aggregate all employee losses attributable to facility closure within 30 days

33. PLANT CLOSING • Also, must aggregate all employee losses within 90 day period unless • losses resulted from separate and distinct causes

34. MASS LAYOFF (but no plant closing) • 33% of site’s active employees, but at least 50 affected employees or • 500 or more employees

35. EMPLOYMENT LOSS • Termination • Layoff exceeding 6 months • Redux in hours by more than 50% during each month of 6 month period

36. EXCEPTIONS TO WARN NOTICE REQUIREMENTS Absolute • Temporary Facility or Project Partial • Unforeseen Business Circumstances • Natural Disaster • Faltering Business -Only applies to plant closing and contingent business

37. PENALTIES • Employees not given notice can recover 60 days pay and benefits • Financial penalties and fees • $500 fine per day • attorney’s fees • NOTE: Remember state law

38. SEVERANCE AGREEMENT CONSIDERATIONS • Separation Pay  Agreement • Finality • Content Control - Nondisparagement - Confidentiality • Cooperation • New Obligations

39. OWBPA Considerations • Age Releases • Strict Requirements • Time • Informational • Content

40. BASIC OWBPA REQUIREMENTS • Written in understandable English • Refer to Act • No waiver of claims after execution • Consideration in addition to current entitlement • Advise consultation with attorney

41. CONSIDERATION IN ADDITION TO ANYTHING OF VALUE ALREADY ENTITLED • Cannot eliminate something of value employee already entitled to receive • ERISA does not prevent employer from conditioning benefits on release

42. CHARGES, FILINGS AND DISCLOSURES • Waiver cannot interfere with protected rights • No requirement prohibiting charge filing • No condition precedent, penalty or other limitation

43. BASIC OWBPA TIME REQUIREMENTS • 21 to 45 days to consider - Exit Incentives - Termination Program - Single Termination • 7 day revocation period

44. OWBPA TIME REQUIREMENTS • 7 day revocation period may not be shortened • Material changes restart period – non-material changes do not • Consideration period may be shortened

45. INFORMATION REQUIREMENTS • Exit incentive or employment termination program • Disclosures of eligibility factors and time limits • Job titles and ages of all eligible or selected • Ages of all in same job classification or organizational unit not eligible or selected

46. DECISIONAL UNIT • Portion of organization from which employer chose • Facility is unit, unless: • small facilities with interrelated functions

47. DECISIONAL UNIT • Personnel utilized for common function at other facilities • Large facility with distinct functions • High level review generally will not change scope

48. PRESENTATION OF INFORMATION • Ages broken down by age of each eligible or selected • Ages broken down by age of each not eligible or selected • Information broken down by grade level or other subcategory

49. PRESENTATION OF INFORMATION • Must disclose information for population of decisional unit • Information must be supplemented