Legal Clinic

Rehiring after Layoffs

Questions this month include how long a company must wait to hire new employees following a layoff, and what obligations companies have to rehire the laid-off workers. The Legal Clinic column also addresses job-abandonment issues.

Monday, March 21, 2011
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Question: Does a company have to wait a certain amount of time to fill a position that has opened up if they previously laid off employees when work was lacking?

Answer: There is no set period of time that an employer must wait until filling a position that has become available following a layoff for economic reasons.

An employer is also under no statutory obligation to rehire an employee whom it laid off as a result of lack of work unless specific language exists in a collective-bargaining agreement or contract outlining provisions for the recall of laid-off employees.

Although there is no general obligation to recall employees, the employer must ensure that its decision not to recall employees is not based on any discriminatory motive, that it is following its own internal procedures and any collective-bargaining agreements, and that it honors any promises that it made to employees upon laying them off. See Zaccagnini v. Chas. Levy Circulating Co., 338 F.3d 672 (7th Cir. 2003).

For example, in Zaccagnini, a 51-year-old driver complained that his former employer's failure to rehire him after a reduction-in-force violated the Age Discrimination in Employment Act, 29 U.C.S. § 621 et seq., as the employer allegedly promised to rehire the employee if it were in the position to hire drivers. New drivers were subsequently hired between the ages of 30 and 35 years of age. 338 F.3d at 672.

The employer changed its reasoning for not rehiring the plaintiff on multiple occasions.

The Seventh Circuit held that such shifting explanations as to why the employee was not rehired could be found to be pretextual in nature. Id. at 680.

Naturally, it will be much easier to avoid liability pitfalls if the position the employer seeks to fill is not one that was subject to layoffs. See Crawford v. Dep't of Investigation, 324 F. App'x 139, 142 (S.D.N.Y. 2009) (holding that allegations that employer was hiring while layoffs were occurring and that younger people were being hired was insufficient where there was "no evidence that the new hires went into positions similar, in level, unit, or duties."); see also James v. N.Y. Racing Ass'n, 233 F.3d 149 (2d Cir. 2000).

Employers will also run into trouble if they chose to recall certain former employees over others under circumstances that do not support their stated reason for the recall. See Joyner v. AAA Cooper Trans., 597 F. Supp. 537 (M.D. Ala. 1983).

In Joyner, the plaintiff and at least three other drivers were laid off due to a slow down in business. Id. at 540. The plaintiff made several inquiries about being rehired but the manager refused to recall him citing depressed demand. Id.

The employer hired both former and new employees in the coming weeks and months. Id. The court held that the employer's refusal to rehire a willing and experienced person into his/her former job was a clear showing that the business reasons stated by the employer were pretextual in nature. Id. at 544.

Although no one factor is determinative and there is no set rubric for how long an employer must wait before hiring after a layoff, the employer must be aware of the many potential red flags that may go up if they hire too soon after a layoff, especially if the person who was laid off is a member of a protected class of individuals.

Employers should follow all internal policies when conducting layoffs, and if a collective-bargaining agreement is in effect, the employer must abide by the provisions contained therein.

Question: What are the criteria for job abandonment in the state of Texas?

Answer: There are no bright-line criteria for job abandonment in the state of Texas. However, it is considered a best practice to include a policy in the employee handbook -- in connection with its written attendance policy -- that clearly defines what the employer considers "job abandonment."

A job-abandonment policy should set forth a reasonable number of days when an employee will be deemed to have abandoned the position (it is generally accepted in Texas that three consecutive days of no show/no call is reasonable), that such abandonment will be considered a voluntary resignation, and an outline of the protocol that will be followed in the event that employee does not report to work.

Of course, in the event that an employee's absence is due to a medical reason, employers should be aware of challenges to termination for job abandonment under the Family and Medical Leave Act, which provides eligible employees up to 12 weeks of unpaid leave for "a serious health condition that makes the employee unable to perform the functions of the position of such employee." 29 U.S.C. § 2612(a)(1)(D); see also Horelica v. Fiserv Solutions, Inc., 123 S.W.3d 492 (Tex. App. 2003) (no violation of FMLA where employee failed to report to work or call for four days.).

Notwithstanding potential FMLA challenges, FMLA leave is not triggered unless the employee provides notice of the desire to take FMLA leave (Brown v. Kansas City Freightliner Sales, Inc., 617 F.3d 995 (8th Cir. 2010), cert. denied, No. 10-665, 2011 U.S. LEXIS 1492 (U.S. Feb. 22, 2011)).

Further, employees must also let their employers know when they reasonably anticipate returning to their position following FMLA leave. Id.

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Before terminating any employee under the auspices of job abandonment, employers should carefully review the underlying facts that have led them to determine that an employee has abandoned his/her job to rule out the possibility that discriminatory factors may have played a role in the decision-making process.

Employers should also make sure that they can demonstrate a consistency in the way they have addressed similar no-show/no-call situations in the past because failure to demonstrate consistency will likely result in costly lawsuits and potential liability. See Arismendez v. Nightingale Home Health Care, Inc., 493 F.3d 602 (5th Cir. 2007) (termination for job abandonment found to be pretext for pregnancy discrimination); Rekieta v. K-Mart Corp., No. 3:96-CV-1142-R, 1998 U.S. Dist. LEXIS 110 (N.D. Tx. Jan. 5, 1998) (holding that termination of employee for job abandonment after one day absence was pretext for discrimination in violation of the Americans with Disabilities Act.); but see In re Inspire Ins. Solutions, Inc., No. 02-41228-DML, 2008 Bankr. LEXIS 1489 (N.D. Tex. May 14, 2008) (no showing of sex or national-origin discrimination where employee was terminated after four days of absence); Wilborn v. Southwestern Bell Tel. Co., No. 3:03-CV-0124-N, 2005 U.S. Dist. LEXIS 4699 (N.D. Tex. Mar. 24, 2005) (plaintiff's termination for job abandonment not pretext for discrimination in violation of ADA); Campanello v. Anthony & Sylvan Pools Corp., No. 3:03-CV-1884-G, 2004 U.S. Dist. LEXIS 18507 (N.D. Tex. Sept. 14, 2004) (termination for job abandonment after three-day absence was not a pretext for sex discrimination).

In sum, because termination for job abandonment can often give rise to costly discrimination claims, before moving forward with the termination, employers should maintain written policies on job abandonment and document their attempts to contact the no-show/no-call employee to ascertain the reason for the unexcused absence.

Employers should also investigate the cause of the absence to determine whether the absence is due to a medical emergency.

All documentation regarding job abandonment should kept in the employee's personnel file, and a letter should be sent, return receipt, to the employee's last known address informing the employee of the termination for job abandonment. A copy of the return receipt should also go into the employee's personnel file and the termination should be categorized as voluntary.

 In most states, Texas included, voluntary resignation will not trigger unemployment liability for employers.

Keisha-Ann G. Gray is senior counsel in the Labor & Employment Law Department of Proskauer in New York and co-chair of the department's Employment Litigation and Arbitration Practice Group.

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