As mass layoffs continue to sweep the nation and impact tens of thousands of employees, it is critical that you understand your legal rights and when to fight your layoff.

The layoffs that began last year were initially concentrated in the technology sector. Now, they extend far beyond the tech industry and have impacted the financial, professional services, consulting, legal, retail, and housing industries. When faced with financial adversity, a company may implement a reduction in force (“RIF”) to reduce its costs, promote efficiency, and increase profitability. However, employers often use a RIF as a guise for masking illegal discrimination and retaliation. Regardless of the label employers apply, discriminatory and retaliatory firings remain illegal and can expose employers to substantial liability.

The tips below will help you fight your layoff and maximize your severance.

You’ve just learned that your position is being eliminated. What should you do?

Before your employment ends, gather as much information as possible about why your job was removed. Do not try to convince your employer that its reasoning is incorrect. Now is not the time to fight your layoff. Instead, learn about the company’s purported justification.

• What criteria did your employer use to identify positions for elimination?
• Are the criteria clear and objective?
• Did your employer apply the criteria consistently?
• Who else faces a layoff, and who does not?
• How is the company treating similarly situated employees?
• Do you notice any patterns among the laid-off employees? For example, are most laid-off employees over the age of 40?

Compare notes with your colleagues. Has your employer provided a consistent explanation?

Further, review your onboarding documents, the employee handbook, and the company’s policies to determine whether you have any post-employment obligations. For instance, if you have a non-compete or non-solicitation clause, you should review it thoroughly. Familiarize yourself with your post-employment duties so that you can comply with them when you search for and obtain new work.

Review your employer’s reference policy to determine if the company provides employment references to potential employers, the information it provides, and how it provides the information. Gather any personal financial or human-resources related information you may need, such as copies of your paystubs, tax forms, performance reviews, stock agreements, and promissory notes.

Importantly, your employer may owe you certain obligations. For example, depending on your employer’s policy, it may need to pay out your accrued, unused vacation leave. It also may provide employment placement services, which could help you obtain new employment.

Continue to carry out your job functions and comply with all company policies.

If your employer has provided advance notice of a headcount reduction, you should continue to perform your job duties. In particular, comply with all company policies to ensure that you do not create a separate and independent justification for your termination.

Remain calm. Do not defame your employer. Doing so could give rise to legal claims, and speaking ill of your prior employer will not help your job search.

Should you fight your layoff?

Review your employment agreement, if you have one.

If you have an employment contract, it determines if and why your employer may fire you. In most cases, an employer who terminates an employee without cause must pay the employee severance under an employment contract. The contract defines the specific amount and terms of the severance. Your employer may not mischaracterize your no-cause separation as a for-cause separation to avoid paying you severance, or refuse to provide the severance required in your contract. Doing so could subject your employer to claims for breach of contract.

If you do not have an employment contract, but your employer fired you for an illegal reason, you may be able to fight your layoff.

An employer may fire an at-will employee for any reason or no reason at all, but not for an illegal reason. In other words, your employer may eliminate your position for a legitimate, non-discriminatory and non-retaliatory business reason, such as reducing expenses during difficult economic times. However, your employer may not eliminate your position based on discrimination or retaliation and use the RIF to conceal the real—and illegal—reason for firing you.

Federal law prohibits employment discrimination on the basis of race, color, religion, sex, national origin, age, and disability.

Moreover, state and local laws may provide broader protection. For example, in the District of Columbia, the D.C. Human Rights Act (“DCHRA”) prohibits employment discrimination against an employee on the following additional grounds: credit information, genetic information, homeless status, marital status, matriculation, personal appearance, political affiliation, and status as a victim or family member of a victim of domestic violence, a sexual offense, or stalking.

Similarly, various federal, state, and local laws prohibit retaliation. For instance, an employer may not subject an employee to a RIF because she took protected leave (such as parental leave), requested a reasonable accommodation, opposed her employer’s discrimination or retaliation, reported fraud upon the company’s shareholders or the government, attended jury duty, exercised any other legal right, or opposed her employer’s other illegal conduct.

If you suspect that your employer removed your position to discriminate or retaliate against you, you may have legal claims. We urge you to seek legal guidance in determining whether to fight your layoff.

If you fight your layoff, how can you show that your employer fired you for an illegal reason?

Even if your employer legitimately eliminated some positions, it cannot include a particular worker in a RIF based on discrimination or retaliation. If an employer eliminates an employee’s position for illegal reasons, merely labeling the termination a “layoff” does not shield the employer from liability. Indeed, in fighting a layoff, an employee has the chance to establish that the employer’s explanation is false and pre-textual, and that the real reason for the firing was discrimination or retaliation. 

Employers seldom provide direct evidence of their illegal conduct. Instead, most employees must prove discrimination or retaliation through circumstantial evidence. While this is not an exhaustive list, some examples of circumstantial evidence that can be used to fight layoffs include the following:

False and pre-textual explanations.

Your employer stated that it has eliminated the positions of all employees who did not meet expectations on their last performance review. However, you exceeded expectations on your last evaluation, and your colleague who received a worse review remains employed.

Shifting explanations.

Initially, your employer claimed that it eliminated your position because your performance did not meet company standards. When you countered that you exceeded expectations on your last performance review and earned a hefty performance-based bonus, the company changed its explanation. It then stated that it terminated the last thirty employees that it hired, including you.

Disparate treatment.

The employer subjected members of a protected class, but not similarly situated employees outside the protected class, to the RIF. For example, the company eliminated an entire sales team, except for two people. The laid-off employees were over the age of 40, but the two individuals who remained employed were significantly younger.

Position not eliminated.

Your employer falsely claimed that it eliminated your position. In fact, it changed your job slightly and then hired someone outside of your protected class for the position. Take note if your employer posts a job that is strikingly similar to your old job, or a job for which you are qualified but to which your employer did not invite you to apply.

Disproportionate impact.

Your employer applied subjective RIF criteria in a way that disproportionately impacted employees in a protected class.

Must your employer offer severance?

The short answer is no, your employer has no legal obligation to provide a severance payment (unless you have an employment contract which requires severance). Many companies offer laid-off employees severance packages to build goodwill and prevent them from asserting legal claims against the company. Indeed, to obtain the severance payment, employees must sign separation agreements and release their legal claims against the employer, which precludes them from fighting their layoffs.

In some circumstances, it might be worthwhile to accept the severance. For example, if you have no viable legal claims, or only tenuous claims, you may sacrifice very little by releasing them.

On the other hand, if you have strong legal claims and supporting evidence, you could recover significant damages in the form of backpay, front pay, emotional distress damages, other compensatory damages, and attorney’s fees and costs. In such instances, your legal claims could be significantly more valuable than the severance payment, and you may put yourself in a far-worse position by releasing your claims in exchange for a modest payout.

An experienced employment attorney can help you evaluate the strengths of your legal claims and decide whether to accept a severance offer or fight your layoff. Critically, employees who seek legal guidance should speak to an attorney before they sign the severance agreement and release their potential claims.

Consider engaging an attorney to review your severance agreement.

If you proceed with severance discussions, you should consider hiring an employment attorney to help review and negotiate your separation agreement. Severance agreements are legally binding documents, the terms of which your employer can enforce against you. Typically, an employer’s attorney drafts its severance agreements, so the language tends to be one-sided and slanted in favor of employers. An experienced employment attorney can push back on the proposed language, ensure that the agreement includes mutual obligations, and protect your legal rights.

Further, some severance agreements attempt to impose new or extended restrictive covenants—including non-compete and non-solicitation clauses. If your employer includes a non-compete or non-solicitation clause in the severance agreement, you should weigh the proposed restriction on your ability to earn a living against the payout under the agreement. For example, if an employer offers a two-month severance payment, but the agreement imposes a broad non-compete that would effectively bar you from working in your industry for a year, you should think twice about signing the agreement.

Importantly, if you are 40 years old or older, your employer must provide you with at least 21 days to consider the release of claims set forth in the severance agreement. Employers may provide a shorter timeframe to younger employees.

This blog post has been prepared for informational purposes only. This blog post is not intended, and should not be construed, as legal advice. The information contained in this blog post is not intended to create an attorney-client relationship, and the receipt of this information does not constitute attorney-client privileged legal advice.