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Studies show that as many as 98% of CEOs are anticipating a global recession in the next 12-18 months, which means that companies have already started focusing on cutting costs and redistributing resources to best position themselves to survive. One of the largest cost centers on any company’s balance sheet is its workforce. As such, layoffs or other reductions-in-force (RIF) have already started to hit, and will likely continue. What’s different this time around? Because of the ups and downs in the market, and phenomena like the “great resignation” and remote work on a scale never seen before, there is a greater likelihood that more employers will find themselves potentially triggering the Worker Adjustment and Retraining Notification Act of 1988 (WARN Act) (and analogous state laws, known as state “mini-WARN acts”) statutes. These statutes impose notice and information obligations, which can be tricky to keep track of, and carry potentially heavy penalties for noncompliance.

What to do?  Employers who see a layoff on the horizon — and even those who may have already undertaken layoffs — should revisit the requirements of WARN (and state mini-WARNs) now, and keep the following “WARN-ings” and practice tips in mind as they work with counsel.

What is WARN and what WARN-ings should companies watch out for?

In short, WARN requires employers to give advanced notice to affected employees in the event of a covered mass layoff or plant closing. Under the federal WARN, employers must provide 60 days’ notice of termination to the impacted employees, union representatives (if applicable), and certain government authorities. Under some state mini-WARN acts, 90 days’ notice is required.

Which employers are covered?

Under the federal WARN Act, covered employers are employers with:

  • 100 or more employees, excluding part-time employees and those with less than 6 months of service in the last 12 months, or
  • 100 or more employees, including part-time employees, who collectively work more than 4,000 hours per week, excluding overtime.

WARN-ing: State mini-WARN acts often have lower thresholds for covered employers.

When is notice required?

Under WARN, covered employers need to provide notice if a triggering event–a “mass layoff” or “plant closing”–occurs.

Mass layoff: A mass layoff is a reduction in force that (i) does not result from a plant closing, and (ii) results in an employment loss at the single site of employment during any 30-day period for:

  • at least 50-499 covered employees if they represent at least 33% of the total active workforce, or
  • 500 or more covered employees.

Plant closing: A plant closing is the permanent or temporary shutdown of a single place of employment or one or more facilities/operating units resulting in an employment loss during a 30-day period for 50 or more covered employees.

How should employers calculate the time frame to determine when WARN notice is required?

WARN always requires aggregating the employment losses that occur over a 30-day period.

WARN also requires aggregation of the employment losses that occur over a 90-day period that did not, on their own, trigger WARN notice, unless the employer can show that the layoffs were the result of separate and distinct causes and are not an attempt to evade WARN.

WARN-ing: Therefore, employers should look ahead and behind 90 days and add up layoffs that have occurred and any planned layoffs to determine whether separate layoffs may trigger notice requirements under WARN.…

Continue Reading Employer WARN-ing: Layoffs Could Trigger WARN Notice Requirements this Time Around

As we wind up 2022 and head into 2023, all eyes are on salary and pay range requirements in job postings. Where these laws apply, what they require, and when they go into effect has been top-of-mind for US employers in 2022.

Here’s what employers need to know now as they navigate the patchwork of…

We are pleased to share a recent Bloomberg Law article, “Employers Await High Court Clarity on Attorney-Client Privilege,” with contributions by Michael Brewer. This article discusses the possible implications the US Supreme Court’s upcoming review of whether attorney-client privilege extends to business-related communications may have for employers and their counsel, who routinely exchange information blending…

Special thanks to Melissa Allchin and Matthew Gorman.

Federal agencies have renewed their focus on job postings that discriminate against protected groups, even when there is no clear intent to be discriminatory. As evidenced by a significant increase in investigations and fines levied over the past four months, the Department…

Special thanks to guest contributors Bradford Newman, Pamela Church and George Avraam.

New Baker McKenzie Survey of 500 US-Based C-Level Executives Reveals AI Blind Spots

Regulatory and enforcement agencies in the US are taking a closer look at artificial intelligence (AI) and its potential for bias and other harms, but a new Baker…

Nondisparagement clauses have long been a staple in settlement agreements between employers and employees as a way to discourage disgruntled employees from debasing the company after they have departed. Nondisparagement clauses often require employees to refrain from saying anything negative about their former employer at all. But employers should keep a few things in mind to ensure that the use of a nondisparagement clause does not create additional risk for the company.

  1. Keep an Eye Out for Activity by the National Labor Relations Board (NLRB)

The NLRB has signaled it may revisit current Board precedent holding nondisparagement agreements in employee settlement agreements are legal-meaning employers should watch out for Board action or decisions reverting to restrictions on nondisparagement agreements. On August 12, 2021, in her first memo as NLRB General Counsel, Jennifer Abruzzo issued a Mandatory Submissions to Advice Memorandum, setting forth that NLRB Regional Directors, Officers-in-Charge, and Resident Officers must submit certain types of cases to the NLRB Division of Advice (“Advice”) (which, in addition to other duties, provides guidance to the NLRB’s Regional Offices regarding difficult and novel issues arising in the processing of unfair labor practice charges).

Abruzzo identified 11 areas of Board case law involving doctrinal shifts from previous Board precedent that the Board, through submissions to Advice, would be examining-including “cases finding that separation agreements that contain…nondisparagement clauses…lawful.”

Abruzzo highlighted cases involving the applicability of Baylor University Medical Center, 369 NLRB No. 43 (2020), overruling Clark Distribution Systems, 336 NLRB 747 (2001), and International Game Technology, 370 NLRB No. 50 (2020) to be submitted to Advice for review.

Before it was overruled, Clark Distribution Systems stated that a provision in the confidentiality clause of a severance agreement prohibiting the employee from voluntarily appearing as a witness, voluntarily providing documents or information, or otherwise assisting in the prosecution of any claims against the company unlawfully chilled the employees’ Section 7 rights under the National Labor Relations Act (NLRA)(which guarantees employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection,” as well as the right “to refrain from any or all such activities.”)

The provisions at issue in the severance agreements in Baylor University Medical Center included a “No Participation in Claims” provision in which the departing employee agreed not to assist or participate in any claim brought by a third party against Baylor (unless compelled by law to do so), and a “Confidentiality” provision in which the employee agreed to keep confidential any of Baylor’s confidential information made known to the employee during their employment. The complainants alleged that by offering the severance agreements with these provisions, Baylor violated Section 8(a)(1) of the NLRA (which makes it an unfair labor practice for an employer “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7” of the Act). The Board disagreed, in part because the severance agreement only pertained to postemployment activities having no impact on terms and conditions of employment. The Board also found that Baylor’s mere offer of the separation agreement was not coercive or otherwise unlawful, and that there was no sign that the agreement was offered under circumstances that would tend to infringe on the separating employees’ exercise of their own or their co-workers’ Section 7 rights.

International Game Technology (IGT) applied Baylor to a separation agreement with a nondisparagement clause,  finding in that case that the severance agreement at issue was entirely voluntary, did not affect pay or benefits that were established as terms of employment, and was not offered coercively-and the nondisparagement provision did not tend to interfere with, restrain, or coerce employees in the exercise of their Section 7 rights under the Act.

What to do?

What should employers do now given the NLRB review of cases applying Baylor and International Game Technology to ensure they don’t run afoul of the NLRA when using nondisparagement clauses in settlement agreements with employees? Employers should:

  • Keep an eye out for changes in the law stemming from the NLRB’s review of cases applying Baylor and International Game Technology.
  • Use precise language to make it clear that a nondisparagement clause only applies at the time of and after termination, to avoid claims that the terms of the clause interfere with an employee’s Section 7 rights under the NLRA.
  • Consult with counsel regarding the possibility of using a savings clause stating that the severance agreement, and specifically the nondisparagement clause, are not intended to prevent the employee from engaging in protected activity under the NLRA.

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Continue Reading “If You Can’t Say Anything Nice…” Keep These Tips in Mind When Using Nondisparagement Clauses in Settlement Agreements with Employees

Many thanks to our colleague in London, Julia Wilson, for co-presenting.

An influx of high profile whistleblowing cases have made headlines in recent years, and claims (and awards) are on the rise. At the same time, more defined and greater protections for whistleblowers are coming into play in the US, UK and…

Whether you need information about a specific US visa type, or are looking for a high-level overview of employer obligations related to the movement of foreign nationals under US immigration and employment law, this handbook covers a wide range of topics and serves as a go-to, desk-side guide for US employers.

The publication is available…

Wary of wage and hour class actions, many employers have been grappling with whether and how to compensate employees for activities related to COVID-19. After nearly two years of guessing, on January 20, 2022, the US Department of Labor (DOL) posted Fact Sheet #84, “Compensability of Time Spent Undergoing COVID-19 Health Screenings, Testing, and Vaccinations Under the Fair Labor Standards Act (FLSA),” on its website. The next day, and with no explanation, Fact Sheet #84 disappeared.

Before it disappeared, Fact Sheet #84 addressed the compensability of time spent undergoing those COVID-19 activities with reference to the Occupational Safety and Health Administration’s COVID-19 Vaccine and Testing Emergency Temporary Standard (the OSHA ETS). Given that the OSHA ETS had been stayed just a week earlier by the US Supreme Court and then was subsequently withdrawn by OSHA on January 26, Fact Sheet #84’s sudden disappearance is perhaps not surprising. Nevertheless, employers should keep their eyes peeled for an updated Fact Sheet #84 that addresses compensability of testing and vaccination time without references to the OSHA ETS, especially since the advice in the now withdrawn Fact Sheet #84 is in line with other prior DOL advice on compensable time for employer-required testing and medical procedures under the FLSA.

What Fact Sheet #84 Said Before It Was Withdrawn

The guidance in Fact Sheet #84 distinguished between testing and vaccination that occurs during regular work hours and after regular hours:

Activities that occur during normal working hours

  • Under the FLSA, employer-required activities during normal working hours are compensable, unless the activity falls within one of the exceptions stated in 29 C.F.R. Part 785 (e.g., bona fide meal breaks and off-duty time).
  • Employees must be paid for time they spend going to, waiting for, and receiving medical attention required by the employer or on the employer’s premises during normal working hours-including COVID-19 related medical attention. Therefore, if an employer requires an employee to engage in COVID-19 activities (such as receiving a COVID-19 vaccine dose, taking a COVID-19 test, or undergoing a COVID-19 health screening or temperature check) during the employee’s normal working hours, the time is compensable time-regardless of where the activity occurs.

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Continue Reading Compensability of COVID-related Activities | The DOL May Have Weighed In to Help Employers Avoid Class Actions