The Work

November 13, 2008 8:34 AM

Employment Lawyers: "We're Busier Than Ever"

Posted by Zach Lowe

Marc Mandelman,  head of Proskauer Rose's group advising companies on layoffs, got a call on Tuesday from a manufacturing company that wants to lay off a large number of employees in about a week and needs to know if they can do so without violating any federal laws.

On the other end of the spectrum, Mandelman also is advising a New York company planning to lay off at least 25 people sometime in February--that's plenty of time to make sure they don't discriminate against any class of employees or run afoul of federal notification laws.

"This is pretty much all I'm doing these days," Mandelman says. "I've been doing this since 1999, and I've never seen anything like this before."

Mandelman didn't have specific billable hours at his fingertips when he talked to The Am Law Daily, but employment firms nationwide say they are setting workload records as companies lay off employees at rates not seen in many, many years. In September alone, 284,000 jobs were lost in the U.S., and the number might be just as high for October once the final numbers shake out.

Jackson Lewis is on pace to bill about 15 percent more hours in 2008 than last year, managing partner Patrick Vaccaro says. Littler Mendelson billed 30 percent more hours this September than last, and expects October to end up being the busiest month in the firm's history, says Marko Mrkonich, Littler's president and managing director. Other firms that represent management, including Morgan, Lewis & Bockius and Seyfarth Shaw, also say their work hours have jumped substantially since September, though they couldn't provide figures.

"Employment law practitioners are uniformly saying they are much, much busier," says John Fischer, the founder and director of the National Employment Law Institute.

On the employee side, Outten & Golden has filed more class action suits accusing employers of violating the Worker Adjustment and Retraining Notification Act in the last two weeks than they did over several months in 2007, attorneys there say.

That federal law requires employers to give at least 60 days notice when they plan to lay off 50 or more employees. The goal is to give employees time to look for another job and 60 days worth of pay and benefits.  It's just one of a morass of legal requirements employers have to wade through in order to reduce staff without opening themselves up to lawsuits. The thorniest laws involve those protecting workers over 40, women, and minorities, says Scott Baken, a Jackson Lewis partner and co-chair of the practice that deals with workforce reductions.

It's not just high volume that lawyers are facing. In these times, they often have to react on short notice, as Mandelman did last Tuesday when the New York company called him about layoffs planned for next week.

"I had to walk them through on the fly as they were making their selections" for the layoffs, Mandelman says.

The bulk of a management-side employment lawyer's work at a time like this is counseling employers on how to avoid litigation, says Penny Ann Lieberman, a Jackson Lewis partner who heads the firm's WARN Act practice. But too many companies still ignore the rules, labor-side attorneys say.

"So few companies are in compliance with the WARN Act," says Rene Roupinian, of counsel at Outten who focuses on WARN lawsuits. Since mid-October, Outten has filed seven WARN class actions against companies across many sectors, including a cookie company based in Michigan, a national car dealership, and  a Missouri company that manufactures triggers for spray cans. Most of those companies reduced staff during bankruptcy proceedings or just before a bankruptcy filing, Roupinian says.

The WARN Act exempts companies who violated its notice rules due to "unforeseeable business circumstances," but courts have not historically counted major economic downturns under that exception, attorneys say.

Some lawyers, including Steven Wall, head of the labor and employment group at Morgan Lewis, expect retailers or manufacturers who lay people off on short notice during the current crisis to try and claim that exception.

"It could be used for retailers who suddenly lose their line of credit or manufacturers whose number one client says it doesn't want any more goods," Wall says.

Whether judges will accept that argument is unclear. Either way, employment firms expect to stay busy for several months as the layoffs keep coming.

"This is a recession-proof practice," Vaccaro says. "But we don't relish an uptick in business that comes as the result of people being laid off."

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The employment firms and good general practice firms with excellent labor/employment practices have all been beefing up the last 3-5 years so they were right!! Just like those firms that started hiring bankruptcy/insolvency partners last year, firms like Littler and Jackson Lewis, Morgan Lewis and Jones Day have followed client needs well. It will continue to get better for them and others before things level off in a couple of years.

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