Guide · Labor and Employment

Reductions in Force and Severance: A Comprehensive Guide to WARN, OWBPA, and Separation Agreements

29 U.S.C. §§ 2101

Type
Guide
Jurisdiction
National
Date
2024-08-23
Topic
Labor and Employment

A comprehensive treatment of workforce reductions and separation agreements. Part I builds the WARN Act element by element — covered employer, plant closing, mass layoff, employment loss including the reduced-hours prong, single site of employment, the 90-day aggregation rule, the three narrow exceptions, sale-of-business allocation, notice recipients and content, and the remedial structure including the cap and the unavailability of injunctive relief — then maps the state mini-WARN patchwork and how to build a multi-site compliance matrix. Part II covers selection: the hierarchy of defensible criteria, disparate treatment and disparate impact under Title VII and the ADEA including the employer's burden to prove a reasonable factor other than age after Meacham, how to run and privilege an adverse impact analysis, and the protected-status screen. Part III covers the separation agreement: the OWBPA's seven elements and group disclosure requirements, what a release can never waive, the McLaren Macomb limits on confidentiality and non-disparagement, restrictive covenants, and drafting the document. Part IV covers the collateral obligations — effects bargaining, ERISA plan status and Section 510, COBRA, Section 409A, final pay, unemployment, and immigration. Part V provides a project plan.

Reductions in Force and Severance: A Comprehensive Guide to WARN, OWBPA, and Separation Agreements

Labor and Employment > Termination and Layoffs | Published 23 August 2024 - Updated 11 May 2026 | UpLaw - uplaw.us

In brief. A reduction in force is a project, not a decision. The decision — how many positions, which functions, what savings — usually takes a week. Executing it lawfully takes eight or nine, because three independent bodies of law have to be satisfied on three different clocks: notice statutes that run backward from the announcement date, discrimination law that governs how the list was built, and release law that determines whether the money bought anything. Employers get into trouble by treating execution as paperwork that follows the decision. It is not. The notice period determines the announcement date, and the selection criteria have to exist in writing before any name is collected, which means the legal work has to happen before the business is ready to move.

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