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Keeping lawsuits at bay as laid-off employees head to court

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[...] develop a clear plan setting forth the business purpose supporting the layoff. [...] a severance package may quell a former employee's feelings of helplessness or resentment, reducing the likelihood of legal action.

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Keeping lawsuits at bay as laid-off employees head to court
NEW JERSEY’S unemployment rate has              — is similarly rising. Each of these can lead to        actions you can take to avoid future litigation.     Instituting layoffs based on broad, undocu-
climbed to its highest level in more than a     very costly and protracted litigation.                       First, develop a clear plan setting forth the   mented reasons, such as general cost savings,
decade, and the rate of employment-related            So, how can you, as the employer, successful-     business purpose supporting the layoff. Docu-        may be more difficult to defend.
legal claims against employers — from allega-   ly weather a slowing economy, while at the same         mentation confirming the business reason                   Next, document the objective criteria to be
tions of underpayment of wages, to employ-      time insulating yourself from potential legal liabil-   behind the decision will be instrumental in          used in determining which employees will be
ment discrimination, to wrongful termination    ity? The following are suggestions for pre-emptive      defending against employment-related claims.         laid off. Make ter-
                                                                                                                                                             mination decisions
                                                                                                                                                             based on neutral,
                                                                                                                                                             quantifiable fac-
                                                                                                                                                             tors. For example,
                                                                                                                                                             subjecting         the
                                                                                                                                                             least-senior person
                                                                                                                                                             in each department
                                                                                                                                                             to a layoff will serve
                                                                                                                                                             as a better defense
                                                                                                                                                             to potential unlaw-
                                                                                                                                                             ful     termination        Melanie J. Perez-Vellios
                                                                                                                                                             claims than will
                                                                                                                                                             subjective factors, such as whether specific
                                                                                                                                                             employees are a good fit.
                                                                                                                                                                   Employers also should consider offering sev-
                                                                                                                                                             erance packages to terminated employees, as
                                                                                                                                                             even a small severance package can extend price-
                                                                                                                                                             less legal protection.
                                                                                                                                                                   First, a severance package may quell a for-
                                                                                                                                                             mer employee’s feelings of helplessness or resent-
                                                                                                                                                             ment, reducing the likelihood of legal action. And
                                                                                                                                                             if properly drafted, a severance agreement can
                                                                                                                                                             thwart future legal action by the employee.
                                                                                                                                                                   In order to maximize the legally binding
                                                                                                                                                             effects of a severance agreement, the terms of
                                                                                                                                                             every package should be clearly set forth, and
                                                                                                                                                             the agreement should contain a release of all
                                                                                            Clients know they can depend on                                  legal claims against the employer through the
                                                                                                                                                             termination process.
                                                                                            Bederson & Company. For over
                                                                                                                                                                   However, not all severance agreements are
                                                                                            70 years, we hav
								
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