REDUCE RISKS ASSOCIATED WITH LAYOFFS Or OTHER REDUCTIONS IN FORCE (RIF)
No employer welcomes the prospect of having to lay off employees or
face a reduction in force (RIF); however, in these challenging economic
times, diffi cult decisions like these may be unavoidable. Here are some
tips designed to try and help your company and your employees if you
are considering a layoff or RIF, and some suggestions on how you might
minimize liability and hopefully avoid making any costly missteps during
Before deciding on layoffs or a RIF consider possible alternatives:
• Where feasible, discontinue use of temp/contract employees and reassign
staff to handled work currently being outsourced; consider internal
transfers where appropriate.
• If possible, restrict or eliminate overtime.
• Encourage or require job sharing/flextime or position restructuring.
• Consider reducing workweeks or shifts or offer voluntary, unpaid leaves
of absence; while this may not be popular, in the end some work is better
than no work.
• Consider offering voluntary early retirement or other exit incentives,
however, you should review these offerings with an attorney before implementing.
• Impose a wage and/or hiring freeze. This could also help bolster your
justification for any reductions made later (see below).
If layoffs or a RIF can not be avoided:
• If you have a policy in your employee handbook
regarding layoffs or RIF’s review and follow it.
• Clearly document the business needs behind the reductions. Identify
and be able to articulate the legitimate business justification for the reductions
and how you determined which positions to eliminate.
• Keep it objective: Focus on bona fi de job requirements and establish
objective criteria to be used to evaluate employees for layoff and to identify
particular job functions to be eliminated. If you already have such
criteria in a collective bargaining agreement or handbook, follow them; if
not, consider creating a matrix of objective factors that can then be scored
• Consider forming a selection committee to review and score the criteria
but ensure that the committee is comprised of a variety of personnel to
avoid appearing discriminatory. Senior management can then review the
findings of the committee before making final decisions. Unfortunately
discrimination claims, particularly age discrimination claims, are all too
common following a layoff or RIF.
• Consult with an attorney to determine if the federal Worker Adjustment
and Retraining Notification (WARN) Act applies. Employers with at least
100 employees are required to provide at least 60 days notice of a “plant
closing” or “mass layoff” as defined under the law.
• Prepare managers and others who will be involved in informing affected
employees about the reductions; explain what to say (and what not to
say) and prepare them to deal with questions regarding final paychecks,
continuation of employee benefits, etc.
• Keep lines of communication open and consider an exit interview to
allow employees to discuss what is happening and, quite possibly, to provide
advance warning of potential problem situations.
• Consider offering services designed to facilitate finding replacement
employment and refer impacted employees to available local and state
• If warranted, consider offering a severance agreement and release for
particular employees or if age discrimination is a concern; keep in mind
that for employees over 40 there are additional federal law requirements
covering such agreements and releases that should be reviewed with an
• Before any decisions are made, review personnel files for completeness.
Layoffs and RIFs can raise a number of potentially time consuming and
costly legal issues and can be a trap for the unwary.
If you have any questions regarding a potential layoff, RIF or any
of the items covered above, please contact our closely held business
group members Randall L. Duncan or Christian F. Boenisch. Christian
is also a member of the firm’s labor and employment group.
Randall L. Duncan
Direct Line: 541-417-6010
Christian F. Boenisch
Direct Line: 503-417-6014
1001 SW Fifth Avenue
Portland, OR 97204-1116
Phone: (503) 242-0000
Fax: (503) 241-1458
360 E. 10th Avenue, Suite 300
Eugene, OR 97401-3273
Phone: (541) 485-0220
Fax: (541) 686-6564
333 High Street, N.E.
Salem, OR 97301-3632
Phone: (503) 371-3330
Fax: (503) 371-5336
Nothing in this communication creates or is intended to create an attorney-client relationship with
you, constitutes the provision of legal advice, or creates any legal duty to you. If you are seeking
legal advice, you should first contact a member of the Closely Held Business Team with the understanding
that any attorney-client relationship would be subsequently established by a specific
written agreement with Harrang Long Gary Rudnick P.C. To maintain confidentiality, you should
not forward any unsolicited information you deem to be confidential until after an attorney-client
relationship has been established.