Reduction in Force

What to Know About Reductions in Force

In 2018, more than 20 million American workers were laid off by their current employer. Even more saw their hours cut or responsibilities changed. Some were placed on mandatory furlough. These types of actions, known as reductions in force, are becoming more and more common as the American economy becomes more complex. Because of this, it is important for workers to know their rights when it comes to reductions in force, and know when a termination is acceptable and when it is not. In Texas, no laws prevent an employer from conducting layoffs or closing a jobsite, and Texan employees are generally considered to be employed at-will. This means that they can be terminated at any time unless prohibited by law. However, some laws such as anti-discrimination laws and collective activity laws offer some protection to workers who are unfairly affected by reductions in force.

When Is a Reduction in Force Not Allowed?

The array of laws that protect American workers from discrimination, such as the Civil Rights Act and Americans with Disabilities Act, also protect workers who have been laid off or furloughed. If an employer makes decisions about a reduction in force that take into account an employee’s race, sex, ethnicity, religion, or membership in any other protected class, then that employment decision is invalid and the employees affected may have a claim for wrongful termination. Employers are not allowed to take targeted adverse action against employees in a protected class, regardless of whether or not they label it a “layoff.”

This protection also extends to workers who engage in concerted activity, which is protected by the National Labor Relations Act. Layoffs, firings, or other reductions in force that are intended to prevent employees from engaging in coordinated activity, or intended to be retaliation for such coordinated activity, are often grounds for a wrongful termination lawsuit. If you and some of your coworkers have been discussing your salaries, or plan to make a complaint to management about safety conditions in the workplace, and you are then furloughed, fired, or reassigned, your rights may have been violated.

Workers under collective bargaining agreements or who have signed private employment contracts also have some degree of protection against reductions in force. For example, if your private employment contract contains a “just cause” provision, or such a clause is in the collective bargaining agreement negotiated by your union, then you may have a claim if you are laid off. You would have to show that the reasons for your termination did not meet the standards of just cause.

You May Be Entitled to Advance Notice of a Layoff

The Worker Adjustment and Retraining Notification Act, or WARN Act, is a Texas law intended to protect workers at large employers from the effects of mass layoffs, plant closings, or other reductions in force. Under the WARN Act, companies that employ 100 or more workers working a combined 4,000 hours or more each week are required to provide a notice of termination in writing to each affected worker in advance of the date of the layoff. If your employer is covered by the WARN Act and does not provide you with this necessary advance notice, you may be able to file a lawsuit to recover up to 60 days’ worth of lost benefits or compensatory damages. However, if you earn wages or receive voluntary severance payments during that period, the amount you recover may be reduced.

How You Can Protect Your Rights

It is important to contact an attorney promptly if you are facing a reduction in force that is discriminatory or in violation of your rights under the WARN Act. The Austin wrongful termination lawyers at Austin Employment Lawyers, P.C. can advise you on your situation and whether you may be able to recover damages, lost benefits, or other remedies. If you believe you have been wrongfully terminated or had other rights violated as part of a reduction in force, you can get in touch with us by filling out our intake form or calling our office at (512) 271-5527.