When the economy slows, companies run into difficulties, businesses scale back their workforce, and layoffs increase.  What do you do if you are facing one of these layoffs?  Many initial inquires that I take in my office come from people recently or about to be laid off and inquiring about their rights. Before talking about your rights, here are the brutal statistics regarding recent layoffs in Texas: (Source: U.S. Department of Labor's Bureau of Labor Statistics).

  • Texas companies took:
    • 95 "mass layoff actions" involving 50 or more workers in December 2008 (twice as many as the same month in 2007).
    • 64 mass layoffs in November 2008
    • 86 mass layoffs in in October 2008.
  • Dallas County had the most anticipated layoffs of 6,387 at 74 companies.
  • Tarrant County had 3,097 layoffs at 38 companies.
  • Bexar County registered 268 layoffs at eight employers.
  • Harris County (Houston) had over 2,600.
  • Travis County (Austin) had 816 layoffs.

These stats are huge!  If you were part of those layoffs, your time has mostly like passed to understand your rights; however, if you are recently part of similar statistics, here are some general pointers to know about your rights:

At-Will Employment

In Texas, most employment is “at-will.”   That means your employer has the right to terminate your employment at anytime, even though a layoff, as long as the reason is not an illegal reason.

However, you have at least some employee rights regarding a layoff.  Here is what you need to evaluate:

  • Discrimination:  Your employee rights protect you from your employer illegally firing you under the guise of a layoff - ask yourself: "is there any discriminatory conduct affecting my layoff?"
  • Unemployment:  You are entitled to unemployment benefits and you need to pursue securing those benefits.
  • Extended Health Insurance:  You can purchase extended health insurance benefits at a significant discount after the passage of stimulus bill via COBRA.
  • Contract Rights: If you have a contract with your employer or covered by a union/collective bargaining agreement your employment is not necessarily fully at will.  That needs to be evaluated.
  • Company Policy:   Your company's plan may be predetermined pursuant to their own policy. Especially important – determine if the severance policy was recently changed prior to the layoff.
  • Statutory Rights:  Your are afforded statutory rights pursuant to federal or state laws.  You need to evaluate your layoff in light of those rights.
  • Pension Benefits - Fully understand how a layoff affects your pension and retirement benefits.
  • Advanced Notice: Depending upon you situation, your employer maybe be required to give you advanced layoff notice, so that you may at least prepare financially to lose your job while searching for another during your layoff notice period.
    • The WARN Act (Worker Adjustment and Retraining Notification Act) requires employers with 100 plus employees to give advance notice of up to 60 calendar days for mass layoffs or plant closures.
    • Managers, supervisors, salaried, and hourly employees are entitled to notice.
    • You are entitled to your pay and benefits to which you're entitled through your advanced layoff notice period, whether or not your employer requires you to work through it.
    • If  you start a new job during your layoff notice period, your 60 day pay ends.
    • If your employer is required to, but fails to honor WARN,  you can file a lawsuit against your employer.
    • You can recover reasonable attorney's fees for a violation of WARN.
  • Final Paycheck:  In Texas, you may be entitled to your final paycheck immediately after employment ends.
    • If you are discharged, you need to be paid no later than the sixth day after your discharge.
    • If you leave your employment other than by discharge, then you are entitled to you last paycheck no later than the next regularly scheduled payday.
  • Severance Pay:  Severance pay is money that you receive in addition to salary and other monies owed by your employer.
    • A severance package is usually severance pay and extended health insurance benefits.
    • Your company is not required to provide severance pay for a layoff unless there is a collective bargaining agreement , written contract, or agreement that entitles an employee to severance pay as part of the layoff rights.
    • If are offered an severance package, consider the following:
      • Your salary
      • Your length of service
      • Are you required to sign a separation or severance agreement in order to receive the severance pay? All packages contain a release clause that will prevent you from taking legal action against your former employer.  You need to understand what you are giving up.
      • Your employer is not allowed to force you to sign a severance agreement by threatening to withhold money that you already earned or entitled to receive.

Many employees are being laid off daily, even lawyers in the big firms.  It is essential to evaluate your rights immediately upon being notified that you are being laid off or terminated.  If you think something is afoul, then ask before letting it pass.

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