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Conducting Your Next Reduction in Force

Conducting Your Next Reduction in Force (Webinar Recap)

On May 22, 2018, I presented a complimentary webinar called “Conducting Your Next Reduction in Force.” For those who couldn’t attend the live webinar, I’m happy to make it available for you to watch at your convenience.

Click here to watch the webinar now.

In the webinar, I discuss:

  • Selection Procedures
  • Notice Requirements
  • Severance Programs
  • Union Issues

An important focus is on planning and executing a reduction in force without creating liability. This includes avoiding discrimination based on protected characteristics such as age, race, and sex.

Don’t have time to watch the whole webinar right now? Click here to download the slides from the webinar.

Why You Should Watch “Conducting Your Next Reduction in Force”

Whereas discharging one employee can be problematic, the potential claims arising from a group termination multiply.

If your organization is contemplating separating multiple employees at this same time for related reasons, then you should benefit from this presentation. I discuss some specific steps for the reduction in force from beginning to end. I offer insights on what can go wrong and what your business should do to avoid missteps.

Learn how to cover your legal bases while downsizing, rightsizing, and more here.

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Contesting New York Unemployment

Contesting New York Unemployment Claims

Are departing employees eligible for unemployment? As usual, it depends. To claim unemployment insurance benefits in New York, employees usually must be totally unemployed, yet available for and seeking work. After that, the most important factors are whether the employee has worked long enough to qualify and the reason for separation from employment. Here, we’ll focus on that last question, as it’s the one employers most often use in contesting unemployment claims.

Before we go any further, here are related free webinars that might interest you:

Why Isn’t the Employee Working?

Unemployed individuals with sufficient recent work history will receive unemployment insurance benefits unless they became unemployed because of a disqualifying reason.

The primary disqualifying reasons for loss of employment are:

  • Voluntary resignation
  • Misconduct

Neither category is entirely straightforward under New York’s unemployment law.

Voluntary Resignation

Employees who quite a job entirely of their own accord usually will not receive unemployment benefits. However, there are some exceptions.

First, the departure must be truly voluntary. Employees who have no real choice but to “resign” may still receive unemployment. This could occur where the employer gives the employee the option to either resign or be terminated. It also includes situations where the employer was treating the employee unlawfully such that the employee understandably felt compelled to leave.

A second scenario is more surprising to employers. Suppose an employee resigns from Company A to work for Company B. If the employee then loses their job with Company B soon enough and for a non-disqualifying reason, then Company A may be credited with some portion of the employee’s resulting unemployment claim. Company A seldom can do anything to avoid or contest this result.

Misconduct

Many employees lose their jobs due to workplace misconduct. However, many of those employees will still receive unemployment benefits. Even when employers contest unemployment claims, proving disqualifying misconduct is difficult.

To win an unemployment claim based on misconduct, an employer must prove either extremely bad behavior or prior specific warning of the consequences for the behavior. In most cases, poor performance will not rise to the level of misconduct under the New York unemployment law.

Examples of misconduct that may justify a denial of unemployment benefits include theft, physical violence, falsifying documents, and workplace drug use. In addition, any misconduct that constitutes a felony should disqualify an employee.

Many other forms of misconduct that support termination of employment will not necessarily result in denial of benefits. These may include poor attendance, insubordination, carelessness, and violation of employer rules. However, any of these behaviors could constitute disqualifying misconduct under the right circumstances. Usually, this requires prior warning of the specific improper behavior and the future consequence of termination followed by more incidents.

Overall, the analysis of misconduct depends on the facts. But close calls usually get decided in the employee’s favor.

Minimizing Successful Unemployment Claims

Most New York employers of any size must accept some unemployment claims as part of doing business. Obviously, one way to avoid these claims would be never to let anyone go against their will. But that probably isn’t a good business model.

Employers who want to minimize the impact on their claims history can take precautions before discharging employees. This includes having clear discipline policies that spell out what forms of conduct are unacceptable. But that alone probably is not enough. Even if not written into policy, most employers will want to follow the concept of progressive discipline. This allows that extreme misconduct will cost employees their job in the first instance. However, employees will get a second chance for less consequential missteps. Any discipline notices should then include specific language about the consequences of further violations. When warranted, that would be termination of employment. With that prior warning in place, an employer’s chances of contesting the employee’s unemployment claim will increase.

For more about ending the employment relationship, check out these webinars: Don’t Fire Me on Friday and Conducting Your Next Reduction in Force.

At-Will Employment Myth

Is At-Will Employment a Myth?

Forty-nine of 50 U.S. states (all but Montana) still formally recognize the at-will employment doctrine. This principle means that either the employer or employee may end an employment relationship at any time, with or without notice, for any reason or no reason at all.  However, there are now many separate limitations on employers’ rights to terminate an employee’s employment. So many that employers should almost never rely on the at-will employment doctrine alone to justify letting an employee go.

Related Webinars:

Should We Throw Out At-Will Employment?

No. At-will employment is still a fundamental premise for the employment relationship.

If nothing else, it places the burden on the employee to prove that their employer violated their individual rights. This helps prevent meritless litigation.

But there is more. It also establishes that any employment is of an indefinite nature by default. That’s the primary reason why its important for employers to reference at-will employment in offer letters, employment contracts, and employee handbooks. Although not always necessary, reciting the at-will employment rule helps eliminate any doubt whether the employment was intended for a specific term.

How Then Is At-Will Employment a Myth?

Fair question. Why do lawyers both emphasize at-will employment and downplay it at the same time?

Basically, while it doesn’t provide much, at-will employment is still the most flexible starting point for employers.

Despite “at-will employment,” an array of employment discrimination laws now place many restrictions on reasons why employers CAN’T fire someone. But there are still a nearly infinite number of reasons why you CAN separate an employee.

Employers can further yield their discretion to end the employment relationship. This is done through contracts–typically, either employment agreements with individual employees or collective bargaining agreements with unions representing groups of employees.

One prevalent contractual limitation on employers’ power to end employment is the “just cause” or “for cause” requirement. Most employers only offer “just cause” protection when they have diminished leverage or increased motivation to satisfy the employees.

These protections are virtually automatic (though not mandatory) components of union contracts. There they are often undefined, with “cause” left to an arbitrator’s discretion.

Some employment agreements also replace “at-will” employment with “for cause” protection. These contracts (especially for higher level employees) often include a definition of what constitutes cause. However, even those definitions are sometimes relatively vague. For example, “cause” may include “poor performance” or “gross misconduct,” terms that are subject to interpretation.

Note: Many public (i.e., governmental) employees obtain constitutional, and often statutory, protections against arbitrary employment terminations. However, some categories of public employees will still default to at-will employment.

Don’t Play the At-Will Employment Card!

Even assuming an employee does technically have at-will employment, it’s risky to wave that around as the basis for discharge. You should always have a better reason than no reason!

In reality, every employer (a) has a reason and (b) knows the reason before they get rid of an employee. Pretending otherwise isn’t believable. So, if you tell the employee, “You’re employed at will, so we don’t have to tell you why you’re being fired,” they will hear, “We don’t want you to know why you’re being fired.” Some will then interpret this to mean, “We can’t tell you why you’re being fired, because it’s an illegal reason.”

So (unless, I suppose, you’re firing an employee for an illegal reason) you probably want to at least clue them into what the real reason is. Sure, there could be a situation where the specifics of a valid termination decision are confidential state secrets. But those are rare, and there’s still a way to deliver a better message than “Because . . . AT-WILL EMPLOYMENT.”

For more about ending the employment relationship, check out these webinars: Don’t Fire Me on Friday and Conducting Your Next Reduction in Force.