Energy Sector Layoffs-Considerations for Employers

Downsizing and employee layoffs are the harsh reality of the plunging oil prices, as reflected by the announcements of many oil and gas companies in recent weeks. When a reduction in force becomes unavoidable, employers with Colorado operations should take steps to ensure compliance with Colorado and Federal laws, as well as contract obligations. Highlighted below are a few of the legal issues that such employers will face in a layoff.

 Managing Risk

To avoid a wrongful termination claim or lawsuit, employers should use objective criteria in selecting employees for job separation that is well documented. Once an initial group is selected, the group should be viewed as a whole to determine whether a disproportionate percentage falls within a protected employee category, such as age, disability and race. Employers should also assess risk on an individual basis, with consideration of any recent protected activity by the employee or military status.

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