In House - The FindLaw Corporate Counsel Blog

Retail Apocalypse Means Business for Employment Counsel

Retail apocalypse.

It conjures up images of angry workers, desolate parking lots, dogs and cats living together ...

Well, angry workers and desolate parking lots will be at the mall closures for sure. Dogs and cats living together, only if a pet store chain is closing.

In any case, the retail apocalypse is coming and it's not going to be pretty. More than 3,500 mall-based stores are shutting down in the biggest wave of retail closures since the Great Recession.

It's not the end of the world; it's just the end of thousands of stores and an untold number of jobs. But as lawyers say, one man's tragedy is another attorney's opportunity.

Not the End of the World

If you are an employment attorney or in-house counsel, you will feel better about the apocalypse if you think of it as helping people and companies in transition. Like walking them toward the gallows ...

Seriously, the key is in the transition. One road could lead a company or an individual to bankruptcy, but another could lead to new opportunities. Let's go down opportunity road.

Store closures most often include layoffs, but not necessarily. If a company can offer jobs at another location, it could spare workers trips to the unemployment line and spare the company unemployment taxes.

The best opportunity would be to sell the location with the employees. But when layoffs are the only option, it is usually better not to fight about it. Unemployment, wage claims, and other administrative law claims are designed for resolution without litigation.

Layoffs With a Handshake

Employees may be entitled to sick pay, vacation pay, and other benefits upon termination. But because everyone is different, mass layoffs require careful planning. Here's a checklist of points to consider:

  • Secure data and sensitive information before announcing layoffs
  • Notify, or WARN under the federal layoff law, employees 60 days before layoff
  • Make sure layoffs do not discriminate against protected groups
  • Review employment contracts and prepare severance agreements when appropriate

Some things, like securing information and severance agreements, can be accomplished with the same stroke of a pen. Also, uncontested unemployment can be used as a form of severance pay.

With a handshake and an agreement about their futures, a company can close its doors and employees do not have to close the door behind them.

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