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How Employers Should Prepare for the Restart of Business

April 6, 2020


While many employers have made and continue to make difficult employment decisions due to state-mandated business closures, this too shall pass. Forward thinking businesses should use this time to begin planning for the day when they can reopen operations. As the stay-at-home orders begin to lift, it will likely take some time – maybe months – for business to return to normal. As a result, employers who have furloughed or laid off employees will have to make difficult decisions as to whether to recall employees, how quickly to recall employees, and in which order to recall employees. We anticipate that the post-shutdown decisions made by employers will cause a flood of new discrimination claims against employers. Employers that use objective criteria in their furlough and layoff decisions will have established a framework for recall based on objective criteria. Those objective criteria may be the best defense against discrimination claims based on the furlough/layoff and recall decisions.

Discrimination Laws

Pennsylvania, New Jersey and New York are all “at-will” employment jurisdictions.  “At-will” means that employers in these states can fire or not recall an employee for any reason that is not prohibited by law.  The federal, state and local laws prohibit certain discriminatory employment decisions for a variety of reasons, which reasons may vary based on location.  For employers with employees located in multiple states or municipalities, employment decisions can be even more challenging.  It may be difficult to know which laws apply, and therefore, applying objective standards is critical in employment decisions.

Below is a quick, general summary of the some of the prohibited classes of discrimination by jurisdiction:

  • United States: Title VII of the Civil Rights Act of 1964 protects employees from discrimination based on race, color, religion, sex, and national origin. The Age Discrimination in Employment Act (“ADEA”) makes it unlawful for an employer to discriminate against an individual because of such individual’s age. The prohibitions under the ADEA are limited to individuals who are at least 40 years of age. The Americans with Disabilities Act prohibits discrimination against a qualified individual on the basis of disability.  The term “disability” means an individual who: (a) has a physical or mental impairment that substantially limits one or more major life activities of such individual; (b) has a record of such an impairment; or (c) is regarded as having such an impairment.
  • Pennsylvania: The Pennsylvania Human Relations Act prohibits discrimination on the basis of race, color, familial status, religious creed, ancestry, age, sex, national original, handicap or disability and use of guide or support animals because of the blindness, deafness or physical handicap of the user or because the user is a handler or trainer of support or guide animals.
  • New Jersey: The New Jersey Law Against Discrimination prohibits discrimination because of race, creed, color, national origin, ancestry, age, marital status, affectional or sexual orientation, gender identity or expression, familial status, nationality, disability, or sex or because of their liability for service in the Armed Forces of the United States.
  • New York: The New York State’s Human Rights Law prohibits discriminatory practices because of an individual’s age, race, creed, color, national origin, sexual orientation, gender identity or expression, military status, sex, disability, predisposing genetic characteristics, familial status, marital status, or status as a victim of domestic violence.
  • Philadelphia: The Philadelphia Fair Practices Ordinance prohibits discrimination on the basis of race, color, sex, sexual orientation, religion, national origin, ancestry, age, handicap, or marital status.
  • New York City: New York City’s Human Rights Law prohibits discrimination based on the actual or perceived age, race, creed, color, national origin, gender, disability, marital status, partnership status, caregiver status, sexual and reproductive health decisions, sexual orientation, uniformed service or alienage or citizenship status of any person. Click here to view the New York City Administrative Code Title 8: Civil Rights

 What Employers Can Do to Protect Themselves Today

While nothing can prevent a disgruntled employee from filing a discrimination claim against his/her employer, if an employer uses objective criteria for furlough, layoff, and recall decisions, the affected employees may view the process as fair, making it less likely that lawsuits are filed in the first case. If a lawsuit is filed, objective criteria supporting the employer’s decisions enable the employer to better defend itself.

First, employers should evaluate how they can continue to work and which departments and employees can continue to be productive during the business closure. When making recall decisions, employers can base decisions on which departments and employees can restart operations.

Second, for those departments and employees who cannot continue to be productive based on the business closure or other economic factor, the employer must determine whether they have a recent written evaluation for each employee or other objective performance metrics, such as sales data or output data. Evaluations or metrics from a year ago may or may not be valid indicators of the current performance of employees relative to their co-workers. By contrast, evaluations performed in December are more likely to provide a reasonable basis for employment decisions. In any performance-based analysis, employers should consider whether there have been any subsequent changes or incidents that should be included in the evaluation.

While some employers might have usable evaluations and disciplinary reports, those evaluations and reports may only be in a hard copy form and thus, still in a closed-down office. If that is the case, an employer will have to determine whether it is legally acceptable and safe to enter the office to retrieve these files.

If an employer does not have access to recent employee evaluations or objective metrics for comparison of employees, we recommend that the employer work with its managers to prepare formal or informal evaluations to determine the most objective way to evaluate and compare employees. If a department or function will not be completely shut down, the decision may be based on those functions that will continue or can be performed remotely or the employees whose skills allow them to perform a broader range of the department’s work. As always when doing evaluations, managers should be reminded that “average should be average.” Not every employee can be “above average,” so it is imperative for employers to advise managers to be honest and diligent when completing the evaluations. An employer with the majority of its employees rated as “above average” risks opening itself to discrimination claims.

To best ensure fairness and objectivity, each manager should document the criteria to be used and, prior to making furlough, layoff, or recall decisions, discuss the criteria and potential application with human resources, a supervisor, or counsel. If possible, any rankings of employees should be prepared for, and sent to, counsel. Drafts of letters, emails, or memoranda discussing the decision-making process may be discoverable in a future lawsuit; therefore, to the extent possible, employers should try to protect this information pursuant to the attorney-client privilege.

What Employers Can Do to Protect Themselves After the Shutdown Ends

Employers should start to develop reopening plans now. In developing these plans, an employer should consider among other things, the needs of its customers, whether it has the materials and supplies needed to restart operations, whether certain departments need to open first, how many employees will be needed to restart the business, and how long will it take to get back to “normal.” Ultimately, when employers begin to recall employees, they should do so based on their employee rankings within a department.

To prepare for the recommencement of operations, employers should also consider the means for relaying information to employees. Do they have current emails and/or telephone numbers for each of its employees? When the recall begins, a formal notice should be sent to the individual employees, which the employee should be required to acknowledge. Employers should also consider the possibility that some recalled employees might not be able to return to work due to the lack of child care and school closures for the rest of the school year. As a result of the recently passed Families First Coronavirus Response Act (“FFCRA”), these employees may be entitled to leave. Employers should have a plan in place for how to address employees who fall into this category.

Employers should also know that when recalling employees, the U.S. Equal Employment Opportunity Commission has advised that an employer can inquire into whether employees are experiencing symptoms of COVID-19 and employers may require doctors’ notes certifying an employee’s fitness for duty. Employers must maintain all information surrounding the employees’ health as confidential medical records.

Finally, it is important for an employer to not only consider, but also prepare for the possibility of permanent layoffs. Again, any permanent lay off decisions should be based on the needs of the company, as well as the same objective criteria discussed above.

If you have any questions or concerns about COVID-19 and its implications for your business and employees, Montgomery McCracken’s Labor and Employment attorneys are available to assist. Visit the firm’s Coronavirus (COVID-19) Resource Center for more information and updates on this constantly evolving situation.