General “Releases” Takes The Worry Away From The Layoff Picture

Employers are being faced with lawsuits after employees are being laid off due to economic times. We have seen a large number of former employees going after their employer for a variety of reasons. Age, Gender and Race discrimination, retaliation complaints, and Wage & Hour allegations have been on the rise. Although I do not agree that we should be “paying off ” individuals heading out the door due to a simple lay off, employers need to stop and consider certain employees who may cause a problem after they leave. We generally know who they are! Employers are offering two weeks pay (or more in some cases) or severance packages for laying off these individuals or key management personnel who are no longer affordable.

General releases are an option. They can simply be a one page document without a lot of legalese. They are designed to release the right of the former employee from any claim arising out of the  work environment with the exception of workers compensation and unemployment insurance benefits. The release can contain a single payment option or wage continuation for a specified period (the individual does not report to work during this time frame).

These releases are not recommended for every employee who is being laid off. Arguably when such a document is presented some may get the notion that they have a claim and may want to defer to counsel. Trust me, most will take the money and run! They know that attorneys get their cut and when it is all said and done they are back to the same amount they would have received anyway. Also, there are those who may argue that the amount is not enough. Hold back a little to see if there is any resistance. If so, you can always add to the pot.

Just as an “FYI” be advised that the general releases cannot include a “noncompete clause” nor a “no-solicitation clause” (pulling away other employees). These clauses are generally not enforceable in California.

As always, if you need any assistance in this area, please contact us immediately.