LEGAL UPDATE

Jen (Vogt-Lowell) Dibble, Esq.Allen Matkins Leck Gamble

Mallory & Natsis LLP

Employee Free Choice Act

• “to amend the National Labor Relations Act to establish an efficient system to enable employees to form, join or assist labor

organizations, to provide for mandatory injunctions for unfair labor practices during organizing efforts, and for other purposes”

Employee Free Choice Act

• Amend the National Labor Relations Act– Prohibit secret ballot elections as the method of

determining employee support for union representation

– Mandate binding arbitration if the parties cannot agree to a contract

– Enhance penalties on employers who resist the unionization of their employees unlawfully

Reductions in Workforce

• Concerns– Violation of federal and state discrimination laws– Breaching contractual obligations

• Legitimate RIF– Based on elimination of positions not particular

employees– Not subterfuge for termination of “problem”

employees

Preliminary Considerations

(1) Consider Alternatives to Layoff/Termination– Offer incentives for voluntary termination in exchange

for a release of all claims– Other Cost-Cutting Measures – Transfers and Recall Rights

(2) Establish Selection Criteria for Termination– Neutral Criteria (ex. Ratings formulas based on EE

qualifications, abilities, productivity, lengths of service)

– Typical Criteria for Retaining/Laying Off Employees– Prohibited Criteria

Typical Criteria for Retaining or Laying Off Employees

• Merit– Performance – recent evaluations?

• Versatility– Ability to perform multiple tasks

• Seniority– Typically in CBAs governing union employees– Preference for “meritocracy”?

• Salary– Careful with older workers

Prohibited Criteria• Age• Sex, race, color, religion or national origin• Pregnancy• Gender and gender identity• Marital status• Sexual orientation• Ancestry• Military service• A pension about to vest• Disability or Medical condition• Filing of a Workers’ Comp claim• Employee’s exercise of a protected right

Preliminary Considerations

(3) Notice -COBRA, WARN and Cal-Warn, CBA, employment contract, personnel policy

(4) Checklist: RIF Guidelines for Minimizing Litigation Risk1) Articulate business need for RIF and business goal to be accomplished2) Can RIF be avoided?3) RIF limited to certain depts or applied across-the-board?

RIF Checklist Continued4) Identify positions to be eliminated5) Set the criteria for selection6) Rank employees7) Check layoff list for adverse impact by protected category8) Any complainers? (WC, whistleblowers?)9) Should additional compensation be provided in exchange

for a release of claims?10) Does RIF trigger WARN or Cal-Warn notice requirements?11) Provide COBRA notice12) Consider transition assistance – ex. Outplacement services13) Train managers on communicating information to

workforce and how to manage reduced workforce after RIF

COBRA Subsidy

• American Recovery and Reinvestment Act of 2009 (ARRA) – Obama signed into law 2/17/09

• Provides for premium reductions and additional election opportunities for health benefits under COBRA for “assistance eligible individuals”

• Eligible individuals pay only 35% of their COBRA premiums

• The premium reduction (65% of the full premium) is reimbursable to the employer as a credit against certain employment taxes

Flexible Work Schedules

• Alternative to traditional 9 to 5, 40-hour work week

• Allows employees to vary their arrival and/or departure times

• Under some policies, employees must work a prescribed number of hours a pay period and be present during a daily "core time"

• Agreement between employer and employee