Employee being terminated

Wrongful Termination During A Recession

By Douglas Lipsky

The tech sector recently saw large-scale layoffs and other industries are sure to follow, as a recession may be looming. While layoffs are often deemed to be reductions in force, wrongful termination may be the real situation. Let’s look at wrongful termination during a recession and what an experienced employment lawyer can help you do about it.

Layoffs During a Recession

Layoffs and reductions in force are common in economic recessions. Therefore, workers must know their rights when it comes to layoffs and when termination is legal, and when it is not.

First, New York is an at-will employment state: employers can fire employees at any time with or without cause. 

Moreover, no laws forbid employers from conducting layoffs or closing job sites. However, antidiscrimination and collective bargaining laws offer workers some protection from wrongful termination during a recession. 

When a Reduction in Force Crosses the Line

An array of federal, state, and local laws protect workers in New York from discrimination, such as:

  • Title VII of The Civil Rights Act of 1964 (Title VII)
  • Americans with Disabilities Act (ADA)
  • Age Discrimination in Employment Act (ADEA)
  • New York State Human Rights Law (NYSHRL)
  • New York City Human Rights Law (NYCHRL)

These laws may also protect workers who have been laid off during a recession. If an employer makes decisions about layoffs that consider an employee’s race, sex, ethnicity, religion, age disability, or membership in any other protected class, employees affected may have a valid wrongful termination claim. In sum, employers cannot take targeted adverse action against employees in a protected class, whether or not the termination is classified as a layoff. 

In addition, the National Labor Relations Act protects workers who take part in concerted activity. Firings, layoffs, or reductions in force (1) intended to prevent employees from engaging in coordinated activities or (2) in retaliation for such activity may be grounds for a wrongful termination claim, regardless of whether there is an economic recession. 

Suppose you and some of your coworkers have been discussing your salaries, or plan to complain to management about workplace safety conditions, and you are then fired or laid off. 

Your employer may have violated your rights. 

Finally, workers under collective bargaining agreements or who have signed private employment contracts may also have some legal protections against wrongful termination during a recession. 

For example, if your collective bargaining or private employment contract contains a “just cause” regarding termination, then you may have a claim if you are laid off. However, to prevail, you must show that the reasons for your termination did not meet the standards of just cause.

Advance Notice of a Layoff

Federal and state laws impose certain notification requirements regarding mass layoffs. First, the federal Worker Adjustment and Retraining Notification (WARN) Act requires most employers with 100 or more employees to provide at least 60 days advance written notice of a plant closing or mass layoff of 50 or more employees at one worksite. 

Moreover, the New York Worker Adjustment and Retraining Notification Act (NYS WARN) provides legal protections to workers in the state facing a mass layoff. NYS Warn covers more private-sector employers than federal law and has lower numerical thresholds that trigger the notice requirement. 

New York employers must provide at least 90 days written notice of a mass layoff, plant closing, or relocation. Civil penalties may be assessed against an employer who fails to comply with the notice requirements, including a fine of up to $500 for each day of the violation. Employees who did not receive advance notice of a layoff may also have grounds for a civil lawsuit. 

Protecting Your Employment Rights During A Recession

If you have been laid off or your employer is considering a reduction in force due to the pending recession, it is important to know your rights. The best way to fight against wrongful termination during a recession is to contact an experienced employment lawyer.

About the Author
Douglas Lipsky is a co-founding partner of Lipsky Lowe LLP. He has extensive experience in all areas of employment law, including discrimination, sexual harassment, hostile work environment, retaliation, wrongful discharge, breach of contract, unpaid overtime, and unpaid tips. He also represents clients in complex wage and hour claims, including collective actions under the federal Fair Labor Standards Act and class actions under the laws of many different states. If you have questions about this article, contact Douglas today.