December 2, 2008

An employer's worst nightmare is brewing. The convergence of certain employment and labor law events is about to create a perfect storm for employers. You need to know what is coming and how to prepare as prevention is the key to weathering the potential havoc.

(1) Discrimination and Wage/Hour Law Suits Continue To Rise
Recently wage and hour claims and Federal discrimination suits have increased at an alarming rate. Actions are now being brought by individuals in addition to the Federal and State labor departments. Your company may face the prospect of costly litigation, a class or collective action, awards of damages against you and the payment of the attorney fees of the prevailing plaintiff.

(2) Employees are More Likely to Challenge Employer Actions in a Recession
Historically, recessions like we are experiencing today, have led to increases in labor organizing and litigation. Reductions in work forces and other cost-saving measures taken by employers are likely to be challenged by employees. We are already seeing employee class action suits claiming that layoffs have not complied with the Federal WARN Act. This is likely to expand when the recently enacted New York State WARN Act becomes effective in February 1, 2009. In addition, downsizing will likely be attacked as discriminatory. Severance packages and releases may also be contested.

(3) A Change in Administration Spells Trouble for Employers
Seventy-three years of labor history is about to be turned on its head. Two years ago, President Elect Obama co-sponsored the Employee Free Choice Act (EFCA). Having already been approved by the U.S. House of Representatives, if enacted, EFCA will make union representation elections easier and faster. Rather than requiring a secret ballot vote, EFCA will mandate union recognition when a union merely obtains authorization cards from a bare majority of employees in an appropriate unit. Contrary to all notions of how unions and employees resolve their negotiations, EFCA will also mandate arbitration of all open issues after 120 days of bargaining. Simply put, an arbitrator may now determine what your employees are paid, what benefits they receive and what hours they work. Under President Obama, the Federal government is also very likely to increase the number of EEOC and Department of Labor complaints and trials. This is not only a concern of large companies. Companies with just two or more employees may be at risk.

We can help you understand how these changes will affect you and how to protect your company against harm. Should you wish to discuss this situation, please call us at 516.747.0300.