How To Conduct Coronavirus Furloughs, Layoffs, and More While Avoiding Discrimination Complaints


As businesses crawl their way through reopening phases, employers are met with challenge after challenge in regard to how to conduct business in a Coronavirus world. The many challenges regarding employees going back to work have largely and rightfully been centered on employee health and safety. Challenges have forced employers to rethink and reconfigure workspaces, employee contracts, and other issues to comply with social distancing guidelines, as well as employee expectations during an unprecedented economic downturn and global health crisis. As employers and employees navigate these unclear waters, employee retaliation and discrimination allegations as a result of layoffs, furloughs, and other decisions affecting employment eligibility have become an emerging concern. Employers can practice the following to help distance themselves from fraudulent and costly employee claims.

Coronavirus’ Economic Effect

By now, we are all aware that the novel coronavirus has disrupted and continues to disrupt our daily lives and standard operating procedures. There is no doubt COVID-19 has caused an economic downturn on a level that has not been felt since the Great Depression. This unfortunate fact has forced businesses and employers across the country to conduct unprecedented layoffs and furloughs in an effort to salvage financial standing and keep doors open as long as possible. As businesses have to make these hard decisions, employment actions have no doubt been made swiftly in the wake of the global health pandemic. As such, affected employees can still file discrimination claims. Texas being an at-will state – which means both employee and employer can leave or terminate the employment relationship at their own will – makes these sensitive decisions much more complicated.

Protecting Businesses and Employees

Businesses will need to tread lightly when conducting layoffs and furloughs, and when resuming business operations that may require employees to be on site. According to the Equal Employment Opportunity Commission (EEOC), a government entity focused on enforcing civil rights in the workplace, discrimination based on race or national origin will not be tolerated. Furthermore, employers cannot make employment decisions based on an employee’s age, sex, race, or physical ability. This means that while an employee may fit into a vulnerable Coronavirus demographic, it is not legal for their employer to make employment decisions solely based on those characteristics.

Businesses should adhere to state and federal guidelines on employee health and safety, including presenting applicable employees with the option to work from home, if they are able. Employers who plan on reopening should have a clear health and safety plan for employees with the option to stay home and work if their job allows them to, as well as the option to stay home if they are not feeling well or are displaying COVID-19 symptoms. Because this virus affects each individual in a unique manner, it’s important that employers treat employees with flexibility depending on their needs during this time. Without doing so, employees may feel forced to return to work; and, if the business implements a policy without the option of remote work, employees may choose to terminate the relationship and sue the business because of it.

Business owners and employers should also be aware of the latest update regarding closure documents. At the beginning of COVID-19, amid massive layoffs and reductions in hours for many workers, the EEOC suspended the issuance of closure documents, also known as Notices of Right to Sue. The EEOC made this determination as individuals claiming discrimination generally have 90 days from the issuance of the Notice to file the lawsuit, and many if not most of the courts across the country were also impacted by COVID-19 closures and local mandates. Since the March 21 suspension, there has been a significant decrease in discrimination and harassment lawsuits against employers.

In a press release issued on August 3, the EEOC stated it is now resuming issuance of Notice to Sue documents, both for charges that were held in suspense as well as for charge resolutions occurring on or after August 3. Employers with pending charges need to diligently keep a look-out for the notices as the EEOC has stated all Notices will be issued by mail.

Families First Coronavirus Response Act

The Families First Coronavirus Response Act protects the health and wellbeing of families in the wake of COVID-19. Under the Act, employers are prohibited from retaliating against employees for requesting or taking leave during the pandemic for certain specified reasons such as a doctor’s order to quarantine or child care closures. If employers are uncooperative with a legitimate employee’s request and/or react by terminating their employment could be subject to legal action taken by former employees for violating the Families First Coronavirus Response Act.

Employee Waivers

Employers required to conduct layoffs  should make use of a waiver document at the time of termination. It is common during layoffs for a business to provide former employees with a severance package in exchange for the employee signing a liability waiver. Typically, these waivers outline that employer and employee mutually agree as to the reason for layoffs, and that the reason does not violate employment discrimination laws. The acknowledgements contained in this waiver by the employee can protect the employer from being sued down the line, but there are very strict guidelines that must be followed

Give Notice

If a business is not in the position to give severance packages to employees, distributing written notice of upcoming layoffs or furloughs to all employees could be an effective alternative. By providing written notice with adequate time (not the day of or before), employees are able to prepare for their next steps and employers can document the reason for layoffs or furloughs. If a layoff or furlough occurs without warning, employees could be left in shock and wondering what they did to wind up terminated, even temporarily. Terminations should be based on the quality of work and overall value an employee brings to their employer; and, unless these reasons are made clear upfront, a business runs the risk of being sued.

Unpaid Furloughs

Another course of action an employer can take instead of layoffs is an unpaid furlough. A furlough is a leave of absence, so a business that does not want to terminate or lose employees could offer an unpaid furlough option to employees. While employees will not be paid during the duration of the furlough, they remain employees and are not terminated.  Many businesses have been furloughing employees across the board for a specific time period such as one week or a month. Whatever furlough system is utilized, it should not be based on an employee’s race, age, gender or any other protected status.

Be Familiar with Employment Law

The best way to protect a business and ensure its employment matters are handled in a legally sound manner is to retain legal counsel with a proven successful track record in labor and employment law matters. It’s important that your lawyer currently practices and represents businesses within your state. Out of state counsel can potentially provide inaccurate advice and actually steer businesses in a negative direction, as every state has its own employment laws. Additionally, it’s important that employers review the Families First Coronavirus Response Act and the Family and Medical Leave Act so they are aware of and understanding of current employment regulations.

Texas Employment Law Attorneys

The economic uncertainties businesses are currently facing have caused necessary workforce reduction for survival. Conducting legally sound furloughs and layoffs during this time is a stressful and complex task that can easily go awry and cause additional legal problems. Hiring the experienced Texas labor and employment attorneys of MehaffyWeber will ensure your business takes appropriate action when conducting workforce reduction efforts. If you are an employer and have questions regarding how to properly conduct layoffs, furloughs, or have other labor and employment related concerns, contact the Texas employment law attorneys of MehaffyWeber for more information on how we can help.