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Lay-offs can lead to claims of wrongful termination

On Behalf of | Jul 6, 2024 | Wrongful Termination |

Employers and the professionals working for them often have different concerns during company layoffs. Organizations may engage in staff reductions because of broader restructuring efforts intended to preserve the business. Other times, shareholders may pressure companies to reduce Staffing as a way of increasing profits. The company likely wants to reduce operating costs without affecting company operations too much.

Regardless of the incentive behind the layoffs, workers included in a layoff tend to focus on the economic impact that a sudden job loss could have on them. When there are numerous professionals from the same company looking for work, there may be too much competition for them to secure a well-paid replacement job quickly.

Employees might try to seek compensation from the company by claiming that their terminations were wrongful. In some cases, a layoff could lead to successful employee lawsuits because of how a company handles the process.

When is a termination wrongful?

Most workers can lose their jobs with little or no notice due to at-will employment statutes. A company can fire a worker for any legal reason or for no reason at all. However, the law still prohibits terminations for certain reasons.

Companies should not retaliate against workers for using their employment rights. A worker who gets fired during or right after medical leave might claim their termination was retaliatory. Workers who asked for on-the-job accommodations or who reported harassment might also believe that a termination was an illegal form of retaliation.

It is also illegal for companies to consider protected characteristics when making decisions about who to hire, fire or include in a mass layoff. If a company specifically terminates mostly workers of one race or doesn’t lay off anyone who belongs to the same religion as the owner, the situation might involve discriminatory terminations. The affected workers may have grounds for a lawsuit.

Both retaliation and discrimination could make a termination illegal. That applies as much to a potentially temporary layoff as it does to a full-fledged firing. Recognizing when a layoff might lead to wrongful termination litigation can help employers make better decisions. Workers who know their rights may also feel empowered to speak up if they believe that a recent layoff occurred for wrongful reasons.