Unraveling the Workforce: Navigating the Aftermath of Mass Layoffs [e322]

July 12, 2023

In this episode, Attorney Nasir Pasha and Attorney Matt Staub delve deep into the complexities of mass layoffs and offer valuable insights, real-life examples, and practical advice to employers grappling with the aftermath of such challenging situations.

Nasir and Matt emphasize the critical importance of effective communication when executing mass layoffs. They stress the need for meticulous planning and the development of a clear communication strategy. Drawing from both successful and problematic examples, the hosts highlight the significance of involving HR professionals, legal advisors, and financial experts to ensure a comprehensive and empathetic approach.

A key legal consideration discussed is the Worker Adjustment and Retraining Notification (WARN) Act. Nasir and Matt provide a comprehensive overview of the federal WARN Act requirements, emphasizing that employers with at least a hundred full-time employees must provide a 60-day notice to affected employees under certain circumstances. They also shed light on state-specific WARN Act regulations, including California’s lower employee threshold.

Discrimination in mass layoffs is another critical area examined. They tackle the challenges associated with making fair termination decisions in larger organizations, stressing the need to establish objective criteria such as job performance and seniority while avoiding subjective factors that may give rise to discrimination claims. Nasir and Matt underscore the importance of maintaining proper documentation and objective evaluations to support termination decisions.

Severance packages, an integral part of mass layoffs, receive significant attention. Nasir and Matt explore the benefits of offering severance, particularly the release of employer liability. While providing general guidelines, such as one week of salary per year of service, severance agreements for executive-level employees may differ based on individual employment contracts.

Full Podcast Transcript

NASIR: Fifty-year low of unemployment.

MATT: The Goldman Sachs CEO had roughly 3,200 employees terminated.

NASIR: Hopefully it’s not spontaneous.

MATT: You know, if someone’s going to be upset, they’re going to be upset.

NASIR: Matt, you’re right. It’s relatively simple to figure out whether you trigger a WARN Act or not.

MATT: Nothing good is probably going to happen.

This is Legally Sound Smart Business where your hosts – Nasir Pasha and Matt Staub – cover business in the news and add their awesome legal twist. Legally Sound Smart Business is a podcast brought to you by Pasha Law PC – a law firm representing your business in California, Illinois, New York, and Texas. Here are your hosts, Nasir Pasha and Matt Staub.

NASIR: All right. Welcome. Fifty-year low of unemployment. That’s what we’re going to talk about today; also, the other side of the coin which is all the layoffs that are going on in the tech sector but especially in the last few months here in 2023, and in particular how to handle those layoffs from a legal perspective.

MATT: Yes, it’s no secret to anyone that’s been paying attention to the news. There’s been a great amount of layoffs – mass layoffs particularly in larger companies. It felt like this was a pretty appropriate topic from the legal standpoint on both ends of the employer-and-employee spectrum to see what exactly is out there and what people can do.

NASIR: Right. We’ve been debating whether to cover this particular topic because we’re in a very weird economy right now – at least from my perspective. Despite the unemployment being at a 50-year low, we are seeing lots of news about layoffs.

So far, it seems to be a lot in the tech sector, but one of the reasons we wanted to cover this is I think we anticipate that this may start expanding a bit. Hopefully not, but when you’re dealing with terminating an employee versus a large group, there are different issues that need to be considered.

MATT: Yes, exactly.

That’s one of the key points in all of this – comparing big companies versus small or medium-sized companies.

For big companies, it’s a whole other consideration for what needs to be done. For smaller companies, there are still some legal aspects that need to be handled, but it’s more the non-legal side of things that I think usually comes into play. You’ll see that in some of the stories that we’re going to talk about with this, but step one is looking at the business itself, seeing the size of it, and making the calls from there.

NASIR: When it comes to layoffs, besides 2020, we’re talking about a different kind of layoff where things have settled down a bit in 2022, and that’s really when layoffs started to occur in the tech sector.

MATT: Yes, I think that’s typically the way it goes.

You see the Googles, the Facebooks – sorry, the Metas.

NASIR: Meta, yes.

MATT: Any of those big tech companies are typically the first wave of layoffs. You’ll see a mass amount at that point, and that sets the tone for the next 6, 9, or 12 months for what to expect from some of the smaller companies. It puts that flag out there and a fair warning on what’s to come in the next year.

NASIR: Right.

We’re not going to talk too much about the cause of this. I think everyone is in touch with the news, but one of the things that was very apparent in all of this is, because of technology changes, because of culture changes, because everyone is working from home, for example, especially in the tech sector, the communications around mass layoffs have both resulted in frankly humorous results and also a lesson in bad practices on what not to do when it comes to laying off a massive workforce. /p>

MATT: Yes, that’s the story everyone sees.

In every story we see in the news, there’s someone that made the wrong decision. You rarely see an instance of some CEO making the right decision, and that’s some story in the news. That’s boring. No one wants to read that.

There’s plenty of stories of executives making the wrong call or doing something blatantly or publicly. There’s quite a few examples of that, but I think what you mentioned is the first key point – the remote worker aspect of it has definitely affected how terminations are done.

Going back to what I was saying before, the big company versus small company, even when there wasn’t remote working – you know, pre-COVID – from a logistical perspective, for a big company, it’s still difficult to lay off a bunch of people at one time.

NASIR: Yes, hundreds – let alone thousands. It’s incredibly difficult. It’s a logistical challenge.

MATT: But now, not only do you have that, but you also have the remote worker aspect. Whether it’s 100 percent remote, 80 percent remote, or whatever percentage, it definitely throws a monkey wrench into how you’re going to approach this.

I’ll look at the smaller companies. You could call someone in and sit down with them, but now mostly everything is done via phone, via Zoom, or what-have-you. People have different opinions on that stuff, but it’s the practicality. It’s like, “Well, it has to be done at this point.” If you’re not coming to the office every day, and your boss told you to come into the office on what usually is a Friday – although we don’t necessarily agree with that – then that’s probably not a good sign at the end of the day.

NASIR: Yes, I was having a conversation – a client was asking what day of the week to terminate somebody. I think we went over this. We have a whole episode on how to terminate somebody, or how not to terminate somebody. A lot of the lessons from that can definitely apply to this topic in particular, but one of the things for sure is, when it comes to communication, it’s not about you. The more you make it about you, the more you are going to definitely fall into these traps.

One of the classic examples that occurred, I think this was a forwarded meme – for lack of a better word – from better.com when he fired all of his employees through a Zoom call. At that time, by the way, when you say, “The boss fired everybody via Zoom,” maybe two years ago, that had some stigma around it, but now, it’s like, “Well, what’s the alternative?”

Like Matt said, are you going to bring him into the office for the sake of firing them? If you’re going to do that en masse, nowadays, people aren’t even in the same city as they used to be because of telecommuting and working from home. Zoom actually may be a better alternative than just over a phone call, or a letter in the mail, or an email.

MATT: Yes, I actually watched that video this morning. I know you had done a play-by-play of it.

NASIR: We should play it right now. Let’s take a look. I haven’t seen it in a while myself. Let’s play it in the podcast. I’m going to take a look at it now.

How not to terminate somebody. Well, let’s first talk about the first good thing that he did – he got right to the point. What did he say?

GUEST: “Your employment here is terminated – effectively immediately.”

NASIR: Right. What he should not have said is made this about himself.

MATT: “This is the second time in my career I’m doing this, and I do not want to do this. The last time I did it, I cried. This time, I hope to be stronger.”

NASIR: They don’t care. That is probably the last thing you should have said. No one cares how you feel.

When you terminate somebody, you have to be compassionate, yet still to the point. Don’t make it about yourself. Anything you say at that point is not going to benefit you for the most part. Keep it short, keep it direct, and make it simple.

In that case, the CEO talks about how this is so hard for him. He had to do this only once before, and the last time he did it, he cried. This is such a self-centered way to approach it. You’re just asking for trouble.

Why are we talking about this? Why is communication important in how you terminate somebody from a legal perspective? It’s because this is all risk management. When we talked about this before – whether it’s a contract dispute or dealing with anybody – how you deal with them and the way that you deal with them – because they are human beings – has a direct impact on legal liability. Hands down.

Similarly, when it comes to terminating an employee, treating them like a human being, but putting that aside for a second, you want to take a look at it from a simple dollars-and-cents perspective. It is in the business’ best interest to treat them as human beings. That’s the bottom line.

MATT: Yes, you’re exactly right.

If you’re looking at it from the liability perspective, either way, if you get terminated, you’re probably going to be upset. That’s not a surprise. But are you going to be more upset or less upset the CEO is basically making it about them? You’re going to walk away even more upset.

Like you mentioned before, that’s one of the reasons that – we’re recording actually on a late Friday – this is the worst time because they sit on it all weekend and think about it. They go home, and it’s just not ideal.

NASIR: Yes, think about the alternative.

From your perspective, if you’re fired on a Monday, Tuesday, Wednesday, or Thursday, if you’re going home to an empty household because the rest of your family is going to school, your spouse is possibly working too, now you’re at home – what else are you going to do but look for another job? Or have fun or take a vacation.

But if you’re going home for the weekend to your family, give them the news that you are now in a bad financial situation possibly, and still have to spend the weekend around everybody, having fun and so forth, it’s a much different kind of setup.

Yes, I never liked the whole “fire on a Friday” concept.

MATT: I was thinking about this earlier. We deal with this all the time with our clients. For the most part, we don’t know the employees being terminated. We have an extra layer of buffer there. I can see where the people that are actually doing it want to push it as far as possible because there is a relationship there. That’s just human nature. I get that, but it’s a tough thing to do.

Again, you mentioned our episode about terminations. We talked about that there, so I won’t go in too deep on this, but there is definitely a wrong way to do it. I’m not sure if there’s necessarily a right way to do it.

NASIR: There’s no perfect way.

MATT: Yes, but there’s definitely a wrong way to do it. I think there are plenty of examples.

NASIR: What about PagerDuty? I thought that was a mistake.

MATT: That’s what I was looking at right now. I think it was seven percent of the workforce. She had a Martin Luther King Jr. quote in there.

NASIR: Just by saying that, that looks bad, but I actually looked up the quote, and now I understand why. Again, it becomes about herself.

MATT: Yes.

NASIR: I’ll read you what she put in her message.

”I am reminded in moments like this of something Martin Luther King said, that ‘the ultimate measure of a leader is not where they stand in the moments of comfort and convenience but where they stand in times of challenge and controversy.’”

What’s interesting about this is that, at first, I’m like, “Wait. Is she talking about the employees? Or is she talking about herself?” I realize I’m pretty sure she’s talking about herself because she’s referring to herself as a leader – as if she had to make that difficult decision.

MATT: I think so.

NASIR: It’s so self-centered.

MATT: Yes.

I don’t know if this is along the same lines, but the Goldman Sachs CEO had roughly 3,200 employees terminated. He said, “I wish I would have done this sooner.” Again, that’s not something you want to say. You’re asking for some sort of legal recourse at that point.

NASIR: You can say that maybe to the shareholders. Perhaps that’s who he was talking to, but that’s not necessarily a good PR message.

MATT: If we’re looking at it from the perspective of the employer – which we typically do – what are the important things to consider? One is timing. We’ve already touched on that a handful of times. You know you’re going to do it. Hopefully.

NASIR: Hopefully it’s not spontaneous, yes.

MATT: Yes, timing is very important. We’ve talked about even timing it down to the day of the week, but I would say this is something that should be thought about months in advance. Unless something catastrophic happens and it’s a rushed decision, this is something that should be well thought out, and well developed, and you have some plan in place. It factors in the remoteness of employees and how many there are and all of that, but the timing of when you’re actually going to do it. We’ll touch on this later, but there are legal aspects to this, too – legal timing.

I think timing is very key in addition to how the actual message is communicated.

NASIR: Yes, like you said, develop a very clear communication plan and evaluate that. Especially if you’re in a large organization, this needs to be a group effort. I feel like, in a lot of these CEO communications, you can tell they are drafted without checks and balances within their organization because they got to their position for a reason.

It’s like, “Look, I’m the CEO. I can handle this. I’m good at communications,” and so forth, but some of those characteristics that may be great for running a company aren’t necessarily great in how to communicate this type of event. Honestly, I think that’s the separation.

First of all, if you are a CEO listening out there, you have got to understand what your strong suit is, and it may be communication, but that does not mean that you are the best communicator in this particular instance.

If you are not a CEO but maybe someone that supports that person that is going to deliver that message, understand that this is something that you have to rein in as you develop this process. We are not about not only getting legal involved but HR professionals and from a financial perspective getting that plan together coherently is incredibly important.

MATT: No doubt. I think something that goes a long way is offering some assistance or help moving forward. I don’t know how you want to define it, but basically saying something to the effect of, “Obviously, this is not ideal for you, but we’re here for you to help.”

Again, depending on the situation, you have to provide certain disclosures, but in general, offering something or extending some sort of arm out there and offering to help in whatever way you can, that really goes a long way. That’s not a legal thing. That’s a personal thing. From what we’ve seen, people react pretty positively to that.

If someone’s going to be upset, they’re going to be upset. You can’t change that, but people that are neutral or on the fence, offering some way to help – one way or another – really does go a long way. This is likely going to be one of the worst days of their year – maybe the worst day, depending on what happens. Whatever you can do to assist them moving forward, there might be a little bit of time taken long term, but it’s worth it for the potential blowback from a disgruntled terminated employee.

NASIR: It’s perfectly okay to do that. I think some employers may – for whatever reason – be reluctant to have any communication after termination because they’re worried about other repercussions of that but understand that it’s entirely normal to provide support and resources post-termination.

It’s more common in bigger companies – what they call outplacement services – basically finding a way to find another position for that person. Even on a smaller level, it’s like, “I have to let you go, but I’m happy to give you a good reference or give you a referral.” Even little things like navigating the unemployment benefits process.

We saw a lot of that in 2020 because the unemployment benefits rules were a little bit different as they made adjustments during COVID. Especially in a mass layoff situation, there’s going to be a lot of people there that have never been fired before or have never faced this particular situation. Something as simple as understanding how to apply for unemployment benefits but also health insurance and things like that is perfectly okay. Frankly, it’s advisable to facilitate that communication and provide those resources to those employees.

MATT: Exactly.

Like I said, it goes a long way. You don’t want to be cold and have people resent you long term. The sooner they find a new job, the quicker they will forget about this whole situation. Whatever you can do to move that along is going to pay dividends in the long term.

NASIR: Right. Let’s start exploring some of the legal risks when you’re doing any mass layoff in particular to that. We can talk about things like the WARN Act and discrimination. We talked a little bit about healthcare benefits and paid leave. Why don’t we just talk about this WARN Act, Matt? Why don’t you start that off?

MATT: Yes, there are both federal and state WARN Acts, but I’ll touch on the federal because that’s the starting point.

Basically, we’re looking at a situation where there is a “mass layoff.” Who’s a covered employer in this situation? We’re talking about an employer with at least a hundred full-time employees. Again, these are big companies. Small companies and medium-sized companies, this isn’t going to apply to you because you’re not going to hit that threshold.

What’s the requirement? You have to provide 60-day notice to the employees that are going to be laid off. What triggers the WARN notice? We are talking about 50-plus employees at one employment site that are terminated within a 30-day period. From full-time employees, 50 to 499, at least 33 percent of the employees are going to be terminated. Above that, I think percentages are thrown out. Again, we’re talking about bigger companies at that point.

The bottom line is the notice. It needs to be provided at least 60 days prior. Or else, there are potential repercussions.

My thought on this is it’s not a difficult thing to comply with at the end of the day. I understand why employers wouldn’t want to give a 60 days’ notice to employees that are going to be laid off because nothing good is probably going to happen during that period, but there are legalities behind it.

If you fit into those categories I just mentioned, you have to provide that notice – both on the federal and possibly the state level, too. For California, I think it’s 75 employees – not a hundred – but the federal one is important. You have to do that. There are specific guidelines you have to follow. You’d be surprised how many big companies have apparently failed to follow this based on the lawsuits that have surfaced in the last couple of years.

NASIR: Right. Almost famously, Tesla is facing a lawsuit regarding a mass layoff they did in January of 2022. I believe that’s still going on, if I recall.

MATT: Yes.

NASIR: Matt, you’re right. It’s relatively simple to figure out whether you trigger a WARN Act or not, especially if you’re a big company. For example, if it’s 500 or more employees that you’re terminating, there’s no percentages, it becomes pretty obvious.

I get that it can become more complicated, especially if you have what are called rolling layoffs, because what happens sometimes is you have people that are making financial decisions and saying, “Look, we are not in a good financial state. Let’s do a first round of cuts. Let’s at least cut all the individuals that are so-called non-essential, et cetera, that are first to go.” The determination of whether to make a first, second, third, or fourth cut is sometimes not known right away. Because of that, whether or not the WARN Act applies can be a little bit confusing. That’s a little bit understandable from my perspective.

MATT: Yes, I don’t want to make it seem like this is really simple. There are a lot of rules and guidelines that go into what triggers it, what doesn’t, and what needs to be done. It’s not just a very easy black-and-white thing. There’s a lot of different components to it.

In general, I was trying to explain how it works, but the way you should look at it is, if you are contemplating a mass layoff, you just need to look into what the actual regulations are before you do it because, the last thing you want to do is terminate a bunch of people, and then later have them come back.

I don’t know if Tesla did it, but I think Twitter had a class action lawsuit. I think Intel might have, but some of these bigger companies had it. It’s not difficult for these employees to bring a class action lawsuit – to group everyone together – because, again, the actual compliance is not really difficult at all.

Going back to what we said earlier, you need to have the plan in place. Once you have that, even if you decide 30 days out that you need to do it, it’s definitely worth waiting that extra 30 days and giving them the actual sufficient notice in order to do so because it’s going to be – I believe the penalties are – back pay and benefits for up to 60 days, depending on how many days. You don’t want to deal with that, obviously.

It’s definitely worth doing it the right way and providing adequate notice – both on the federal and state level.

NASIR: Right.

When it comes to the other nuances of how the notices are supposed to go, if you are even considering the fact that you may have to comply with a WARN notice, this is definitely not something you do by yourself. It’s not even something that most HR professionals or HR departments are trained to handle. These are sometimes once-in-a-lifetime events that a trained attorney or experienced attorney in this particular area is really necessary. I know we say that in general, but in this case in particular.

From a WARN notice perspective, it’s either you comply or not. From a discrimination perspective, this is a little bit harder to manage in certain companies. This is what I mean.

Picture a large company. You have to reduce your workforce by – let’s say – a thousand employees. Now, how do you do that? It’s unlikely that you want to lay off a thousand employees in one department. Or perhaps it’s one location. We talked about a single site of employment closing – if that’s 50 employees or more, then that triggers the WARN Act, for example. But I’m talking about if you need to reduce across the board a thousand employees, how do you decide which employees are going to be let go?

Typically, in most organizations, they have multiple layers of management, et cetera. From the top down, it’s like, “In this department, we need to reduce your employment cost by 10 percent; in this department, 20 percent; in this department, 50 percent.” It flows down until you get to a point where there’s actually people making decisions on which people. Of course, they’re going to talk to the supervisors of those individuals.

That’s where you’re going to run into problems because, if you have a team of five people, and the manager is deciding which of those five is going to be terminated, and they decide to terminate the person that maybe they just filed a complaint about in HR, or they are from a completely different race than the other four individuals and the manager, and they terminate that person. These things that are maybe looked at on a one-to-one basis for termination – you know, this risk analysis from a termination – are often missed when you’re doing it through a mass layoff because it’s hectic and time-sensitive to actually make decisions. When it comes to discrimination lawsuits, it’s incredibly common to have this occur in any kind of mass layoff situation.

MATT: Yes, that’s the tricky component to this, but it’s not indifferent from where you have a department of five people, you’re terminating one of the five, and “how do you make that decision?” but I think it gets heightened because there’s more people being terminated. There’s more coming into play, but you are exactly right.

Again, you have a department of five people. Let’s say they all have the same position. You’re going to do a mass layoff. You’re going to lay off one of the five or two of the five. You’re talking about different genders. You’re talking about different nationalities and different races. Different ages, too. Any of those protected classes, it’s definitely something.

I know the ones that we’ve done in the past, it’s analysis that needs to be done because we need to look at that. You want to make sure in general – this is not the legal advice – it is not disproportionately against one of those protected classes versus the other. That is not the end all, be all, but that is a general guideline. You cannot live by that rule, but—

NASIR: It’s a way to discover whether or not there are individuals within your organization that may be making decisions that are based upon race, for example, and to question that. That’s the thing too. When you’re terminating one person, then there’s typically some deliberation. There are multiple people involved and so forth, but because of the nature of mass layoffs, and because often it’s just coming from the top, communication is actually very protected until the decision is announced.

You see this very goofy situation. I knew somebody who was at a big organization. They were going through layoffs. Their team leader was continuously giving assurances to them. “You guys are protected. I know they’re going through another round of layoffs, but I’ve been reiterating that our team is particularly protected.” The day of that particular conversation, that team leader was terminated. You can imagine, in that situation, she didn’t know that she was on the chopping block.

Because of these deliberations or considerations, giving a call to your attorney, “I’m going to meet with this individual tomorrow. I’m going to terminate this person because of X and Y reasons. I wanted to get your advice,” there’s none of that. How are you going to have that kind of conversation on a thousand employees? It’s not practical.

That means that you have to make an extra effort to figure out how to address that which is really difficult.

MATT: Yes, but we kind of did the analysis in reverse here because step one is looking at exactly what we’ve been talking about and making sure there’s nothing discriminatory. Step two is actually the procedural aspect of the WARN notice – if you have to give that notice to the employee.


MATT: If we’re talking mass layoffs from the legal aspect, this is the big one. There are obviously other considerations in play, but that’s the big-ticket item that you have to worry about. Again, it’s only for larger employers. If you have 10 employees and you’re terminating half of them, I guess you could view that as a mass layoff, but not from the perspective of the WARN Act.

NASIR: Right.

Here is a quick tip on how to actually avoid discrimination. First, it’s ideal to establish a clear objective criterion. Now, you can’t do this well unless you have retained frankly objective evaluations of your employees because, if you are going to terminate the lowest performers, you have to have documentation of their performance. Ideally, their job performance should probably be the number one objective criteria – as objective as it can be, of course.

Things like seniority and other skills on paper are things that you can document and justify the termination. Then, you have to avoid the subjective factors coming into play. In other words, instead of having the individuals that necessarily are working with those individuals’ day-to-day perspective, you have one level above that that then assesses.

“I recommend these individuals – based upon what’s on paper – to be terminated.” Then, you go to that one level up – the supervisor or direct reports – and you advise them. “These are the people that I’m thinking about terminating. Is there any reason why we should change this?” They may say, “This person went to so and so college, but they are really horrible.”

Those are subjective, but that’s some feedback that maybe you want to make some decisions that are different than what’s on paper. Really, there’s not much else to it than that in order to avoid any kind of discriminatory actions. Unfortunately, sometimes you fall into a situation where someone is terminated and they believe unjustly, “Why me and not the other person?” They may come up with their own reasons.

Even if it’s not the actual reason, if you have failed to document their poor performance or even their mediocre performance or their performance that is not stellar compared to others, then you might get into trouble when it comes to justification of their termination.

MATT: Yes, we’re right at the finish line of this episode. I knew you’d lead me into an Office reference.

NASIR: Sure.

MATT: It was one of the first couple of episodes when Michael has to fire someone. Dylan, right?

NASIR: Right. That was one of the first episodes.

MATT: Yes, he’s like, “Creed? Fire him.”


MATT: That’s exactly what you just said. “Why me?”

NASIR: Right.

MATT: Then, actually, Michael got turned on it.

NASIR: Yes, he actually changed his mind. Or did he? Yes, he actually ended up firing him.

MATT: Well, he spoke to Creed first.


MATT: Then, the other conversation I just mentioned. It went both ways.

NASIR: It is funny because – those who have terminated individuals are probably aware of this – it’s a very common conversation you have. There’s this negotiation – not everybody but this negotiation to try to avoid the termination. In theory, it should never be a negotiation, but in that episode, of course, Michael changes his mind which I think is funny.

He has also entered into situations. I think there was one where someone quit then he said, “No, you don’t quit. You’re fired.” Of course, it’s horrible because, from an employer’s perspective, you have unemployment insurance, but also he mentioned something about severance.

We should talk about severance, actually. Oftentimes, in large and small companies, it’s not uncommon to have severance packages as part of the layoff process. Of course, this is an open secret, but the biggest benefit of any kind of severance package is what? The release of liability of the employer.

MATT: Yes.

NASIR: That is what you’re paying for. I know that sounds crass because, obviously, if you’re letting someone go, you want to give them a parachute out, so they can have a soft landing, but the reality is that is a way to hash out any kind of issues that there may be.

If you have individuals that are refusing to sign a severance, well, maybe there’s an issue surrounding that, and maybe they want more. They’re like, “Look, I have some issues I’m going to bring up unless I get paid more.” That happens all the time. In fact, it’s probably advisable to have some kind of package of severance when you’re doing a mass layoff.

MATT: It ties into your previous point about the discrimination. Severance should be applied equally based on everything.

NASIR: Objectively, yes.

A lot of people ask us, “How much severance?” There’s an unwritten rule or standard that we often see which is one week of salary per year. That typically changes when you get to the executive level. There is an expectation of something more. But then, of course, if the termination is high risk, then that rule is often deviated. Again, this is a rule of thumb – not an actual rule.

MATT: Yes. Well, unless you have guidelines and some sort of handbook or something like that, but that’s pretty uncommon to see.

NASIR: Or it could be in their employment agreement sometimes, for executives especially.

MATT: Yes. If we’re talking top-tier level, it’s a little bit different, but usually we will see set guidelines that have to be adhered to. It’s a good point, too. It definitely is another factor. I’m sure we talked about that in the termination episode. I think we did.

NASIR: I’m certain.

Some of the other couple minor items before we finish up, again, it’s not unique to mass layoffs, but things like COBRA and giving them access to health insurance afterwards. That’s something that’s mandated by law – communicating that and providing that information is pretty important. Again, it is part of having that soft landing.

Some of the things that you have to deal with that is perhaps unique for mass layoffs is when people are on leave. Typically, in general, it is frowned upon to terminate somebody that is on medical leave, attorney leave, FMLA, or whatever because that can look like it’s being discriminatory towards that person for taking leave which would pretty much be an automatic lawsuit.

But in a layoff situation, when you are terminating a thousand people, there’s going to be a certain percentage of that population that is going to be on leave. Just because they are on leave doesn’t mean that they are necessarily protected from being laid off. The unfortunate part is that, if the employee is laid off during certain FMLA leaves, some of their job protection rules do not apply anymore, and it is possible to do that.

Again, this is something that you should be careful with as far as how to handle that a little bit differently.

MATT: Yes, just another consideration.

I was going through my notes. I don’t know if this qualifies as a mass layoff or not, but my favorite layoff story of the year so far was Google, I believe. I think this was in January. They show up to work, and either their badge worked, or it didn’t. They were all confused. It was like, “This must be a malfunction.” They would walk in, and security escorted them out if their badge didn’t work. That’s how they found out they got terminated.

NASIR: We actually did a real skit about that exact situation. Remember?

MATT: Right.

NASIR: I think it was Trang. Her card wasn’t working – as if she was being laid off.

We did “what are the worst ways” or “ways not to fire somebody” or something like that.

MATT: Yes, I don’t know if that falls under the category of mass layoffs. I can’t remember how many, but that was probably the worst.

NASIR: It is goofy. Who thinks of these things? “We need to terminate everybody. How should we do it? Why don’t we turn off their key cards and then lock the door? That’s perfectly normal.”

MATT: Well, two or three offices ago, the bottom floor was this Italian market. I guess they basically did that to all of their employees. The employees showed up one day.

NASIR: It was closed down.

MATT: Yes, it just shut down, they didn’t pay them, and that was that. It does happen.

NASIR: It does happen, yes.

MATT: It’s unfortunate, but I guess if you’re going out of business, at that point, you probably just don’t care.

NASIR: All right. I think that’s our episode. Hopefully these mass layoffs continue to stop or continue to be isolated at least. Again, from what I’m hearing, even if there are these mass layoffs in the tech sector, the tech sector is still doing pretty well. I think they’re just transferring to other jobs, but let’s see. Hopefully, things continue to stay well.

MATT: Yes, we don’t like to talk about this topic.

NASIR: What do you mean? You love it. You wanted to talk about this. “Let’s talk about people’s misery!” I think that’s what you were saying last week, right?

MATT: That’s true, yes. That’s a good point. I forgot about that.

NASIR: All right, guys. Thank you for joining us.

MATT: Yes, keep it sound, keep it smart.

Employment Law Page


The Podcast Where Nasir Pasha and Matt Staub cover business in the news with their legal twist and answer business legal questions that you the listener can send it to info@legallysoundsmartbusiness.com.

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Legally Sound Smart Business

A business podcast with a legal twist

Legally Sound Smart Business is a podcast by Pasha Law PC covering different topics in business advice and news with a legal twist with attorneys Nasir Pasha and Matt Staub.
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Latest Episodes

November 21, 2023

In this episode, Nasir Pasha and Matt Staub explore the legal implications of Artificial Intelligence in the business world. They delve into the most talked-about issue of 2023: AI and its impact on the legal landscape. Although AI isn’t necessarily a new topic, it has many unanswered questions in the legal world. Nasir and Matt…

July 12, 2023

In this episode, Attorney Nasir Pasha and Attorney Matt Staub delve deep into the complexities of mass layoffs and offer valuable insights, real-life examples, and practical advice to employers grappling with the aftermath of such challenging situations. Nasir and Matt emphasize the critical importance of effective communication when executing mass layoffs. They stress the need…

January 9, 2023

As the COVID-19 pandemic swept across the globe, businesses scrambled to adapt to the new reality it presented. In this blog post, we dive into the case of Goldman Sachs, a financial services giant, to examine their response to the crisis and the lessons other businesses can learn from their return-to-office strategy. From prioritizing employee…

October 28, 2022

Full Podcast Transcript NASIR: Finally, my two favorite worlds have collided – both the law and the chess – right here at Memorial Park in Houston, Texas. Windy day. We have some background noise – ambient noise. What are the two worlds that collided? Well, Hans Neimann has sued Magnus Carlsen for defamation in one…

September 26, 2022

Through a five-round championship bout, Matt travels to Texas from California to determine which state is better for business. Will it be a knockout with a clear winner or will it go to the scorecards?

July 7, 2022

Whether you are buying or selling a business, the transaction goes through the same steps. However, they are viewed from different perspectives. Sellers may not want to fully disclose all the blind spots while Buyers will want otherwise. Nasir and Matt battle it out in this Buyer vs. Seller to determine who has the advantage!…

May 12, 2022

When it comes to Restrictive Covenants, employers are fighting to keep their company safe while employees may use them to their advantage. Keep listening to find out if the Employer or the Employee wins this battle. Round 1: Trade Secrets A company’s trade secrets encompass a whole range of information and are one of the…

February 14, 2022

The Supreme Court rejected the nation’s vaccine mandate. Businesses with 100 or more employees are NOT required to have their employees vaccinated or go through weekly testings. However, this policy remains in effect for health care facilities. In this episode of Legally Sound | Smart Business, the team sat down to discuss their thoughts on this ruling.

December 1, 2021

In this episode of Legally Sound | Smart Business by Pasha Law PC, Nasir and Matt cover the Business of Healthcare. There is more to the healthcare industry than just doctors and nurses. Many Americans have health insurance to cover their yearly needs, but most Americans are not aware of what really goes on behind…

October 12, 2021

In our latest episode, Nasir and Matt are covering the legal issues on Social Media. The average person spends most of their day on social media, whether they are scrolling for hours or publishing their own content. However, just because you publish your own content on Instagram does not equate to you owning that image….

September 28, 2021

What is a Non-Disclosure Agreement, and when do I need one? In this episode, Nasir and Matt shares why you need to use Non-Disclosure Agreements, basic facts about NDA’s, and discuss about the infamous Jenner-Woods story. Having the right Non-Disclosure Agreement in place not only protects you and your business, but it also makes the…

June 16, 2021

Covered in this episode of Legally Sound Smart Business are some typical business mistakes blunders small businesses often make and how to avoid them. Blunder #1: Copying and pasting agreements It may sound like a good idea at the time, but this blunder comes with hidden pitfalls. Having an attorney draft terms that are specific…

February 4, 2021

How you terminate an employee can make the difference between a graceful transition to avoidable negative outcomes like a dramatic exit or even a lawsuit. We gathered a panel of experts and asked them – is there a “right way” to fire an employee? We would like to thank our guests for this episode: Amr…

December 2, 2020

The COVID-19 pandemic has turned nearly every aspect of life on its head, and that certainly holds true for the business world. In this episode, Matt and Nasir explain how the early days of the pandemic felt like the Wild West and how the shifting legal playing field left a lot open to interpretation and…

November 16, 2020

After plenty of ups and downs, our buyer has finally closed on the purchase of their business. While we’re marking this down in the ‘wins’ column, it never hurts to review the game tape. In this final episode, our hosts, Matt Staub and Nasir Pasha, return to the deal almost a year later to reflect…

September 15, 2020

The ink is drying on the signature line and things are looking great for our buyer. After so much hard work, the finish line is in sight and the cheering within ear shot.   Though the landlord is still serving friction, things seem safe to move forward and for now, our buyer will be keeping…

July 31, 2020

Though things are coming along well, the journey would not be interesting if it was purely smooth sailing. After our buyer opens escrow, they are forced to push the closing date back when suddenly a letter from an attorney was received claiming the business, we are buying has a trade mark on the name!  Now…

June 12, 2020

With frustration at an all-time high and professionalism at an all-time low, our friend the Buyer has “had it” with the Seller and quite frankly their lack of knowledge. At present our Buyer is rightfully concerned that the latest misstep from our loose-lipped Seller will threaten not only the entire operation of the businesses but…

May 11, 2020

As we go deeper into the buying process, we start to uncover more challenges from our seller and encounter some of the wrenches they are tossing our way. When we last left off in episode three our team was knee deep in due diligence for our buyer, had already penned and signed the Letter of…

April 4, 2020

One word–interloper! When a new mysterious broker enters the transaction and starts to kick up dust, Nasir and Matt take the reins. The seller signed off on the letter of intent (see episode 2), yet this “business broker” serves only friction and challenges by refusing to send financials, whilst demanding more of a firm commitment…

April 4, 2020

Just as most stories and deals start out, everyone is optimistic, idealistic and full of hope for clear skies. It’s a perfect outlook with a perfect setup for the ups and downs yet to come. Peek further behind the curtain and into the first steps of buying a business: the letter of intent. After the…

April 4, 2020

When a savvy buyer hears opportunity knocking to purchase a prime positioned business, she decides not to go it alone and taps in the professionals to help navigate what could potentially be a fruitful acquisition. “Behind the Buy” is a truly rare and exclusive peak into the actual process, dangers, pitfalls and achievements, that can…

August 7, 2019

GrubHub is subject to two “matters of controversy” that have likely become common knowledge to business owners: “fake” orders and unfriendly microsites.

May 28, 2019

In this podcast episode, Matt and Nasir breakdown the legal issues of the subscription industry’s business on the internet. Resources A good 50-state survey for data breach notifications as of July 2018. California Auto-Renewal Law (July 2018) Privacy Policies Law by State Why Users of Ashley Madison May Not Sue for Data Breach [e210] Ultimate…

March 12, 2019

In recording this episode’s topic on the business buying process, Matt’s metaphor, in comparing the process to getting married probably went too far, but they do resemble one another. Listen to the episode for legal advice on buying a business.

December 3, 2018

Nasir and Matt return to discuss the different options available to companies looking to raise funds through general solicitation and crowdfunding. They discuss the rules associated with the various offerings under SEC regulations and state laws, as well as more informal arrangements. The two also discuss the intriguing story about a couple who raised over…

July 24, 2018

Flight Sim Labs, a software add-on creator for flight simulators, stepped into a PR disaster and possibly some substantial legal issues when it allegedly included a Trojan horse of sorts as malware to combat pirating of its $100 Airbus A320 software. The hidden test.exe file triggered anti-virus software for good reason as it was actually…

April 17, 2018

Attorneys Matt Staub and Nasir Pasha examine Mark Zuckerberg’s congressional hearings about the state of Facebook. The two also discuss Cambridge Analytica and the series of events that led to the congressional hearings, the former and current versions of Facebook’s Terms of Service, and how businesses should be handling data privacy. Full Podcast Transcript NASIR:…

March 10, 2018

The Trump presidency has led to a major increase in ICE immigration enforcement. It’s critical for business owners to both comply with and know their rights when it comes to an ICE audit or raid. Nasir, Matt, and Pasha Law attorney Karen McConville discuss how businesses can prepare for potential ICE action and how to…

February 5, 2018

New years always bring new laws. Effective January 1, 2018, California has made general contractors jointly liable for the unpaid wages, fringe benefits, and other benefit payments of a subcontractor. Nasir and Matt discuss who the new law applies to and how this affects all tiers in the general contractor-subcontractor relationship. Click here to learn…

January 2, 2018

With a seemingly endless amount of new mattress options becoming available, it is unsurprising that the market has become increasingly aggressive. As companies invest in more innovative solutions to get in front of customers, review sites, blogs and YouTube videos have moved to the forefront of how customers are deciding on their mattresses and how…

December 7, 2017

In recent months explosive amounts of high profile allegations of sexual harassment, assault, and varying acts of inappropriate behavior have transcended every sector of our professional world. With a deluge from Hollywood and politics, and the private workforce, accusations have inundated our feeds and mass media. This harassment watershed has not only been felt within…

November 16, 2017

If you are not familiar with the EB-5 program started in 1990 to give green cards to certain qualified investors in the United States, then you may not have been alone a few years ago. Currently, the EB-5 program has since exploded since its inception and now hits its quotas consistently each year. The program…

October 10, 2017

Government requests come in multiple forms. They can come in as requests for client information or even in the form of investigating your company or your employees. Requests for Client Information General Rule to Follow Without understanding the nuances of criminal and constitutional law and having to cite Supreme Court cases, any government requests for…

August 24, 2017

Nasir and Matt suit up to talk about everything pertaining to employee dress codes. They discuss the Federal laws that govern many rules for employers, as well as state specific nuances in California and other states. The two also emphasize the difficulty in identifyingreligious expression in dress and appearance, how gender-related dress codes have evolved…

June 28, 2017

Nasir and Matt discuss the life cycle of a negative online review. They talk about how businesses should properly respond, how to determine if the review is defamatory, the options available to seek removal of the review, how to identify anonymous reviewers, whether businesses can require clients to agree not to write negative reviews, and…

June 7, 2017

On this episode of the Ultimate Legal Breakdown, Nasir and Mattbreak down social media marketing withguests Tyler Sickmeyer and Kyle Weberof Fidelitas Development. They first discuss contests and promotionsand talk about where social media promotions can go wrong,when businesses are actually running an illegal lottery, and the importance of a soundterms and conditions. Next, they…

April 3, 2017

On this episode of the Ultimate Legal Breakdown, Nasir and Matt go in depth with the subscription box business. They discuss where subscription box companies have gone wrong(4:30), the importance of a specifically tailored terms and conditions(6:30), how to structure return policies (11:45), product liability concerns (14:45),the offensive and defensive side of intellectual property (19:00),…

February 1, 2017

Nasir and Matt discuss the suit against Apple that resultedfrom a car crashed caused by the use of FaceTime while driving. They also discuss howforeseeable use of apps can increase liability for companies. Full Podcast Transcript NASIR: Hi and welcome to Legally Sound Smart Business! I’m Nasir Pasha. MATT: And I’m Matt Staub. Two attorneys…

January 5, 2017

The guys kick in the new year by first discussing Cinnabon’s portrayal of Carrie Fisher as Princess Leia soon after her death, as well as other gaffes involving Prince and David Bowie. They alsotalk about right of publicity claims companies could be held liable for based on using someone’s name or likeness for commercial gain.

December 22, 2016

Nasir and Matt discuss the recent incidentat a Victoria’s Secret store where the store manager kicked out all black women after one black woman was caught shoplifting. They then each present dueling steps businesses should take when employees are accused of harassment.

December 8, 2016

Nasir and Matt return to talk about the different types of clients that may have outstanding invoices and how businesses can convert unpaid bills to getting paid.

November 10, 2016

After a long break, Nasir and Matt are back to discuss a Milwaukee frozen custard stand that is now revising it’s English only policy for employees. The guys also discuss how similar policies could be grounds for discrimination and what employers can do to revise their policies.

October 6, 2016

The guys discuss the new California law that allows actors to request the removal of their date of birth and birthdays on their IMDB page and why they think the law won’t last. They also discuss how age discrimination claims arise for business owner.

September 29, 2016

Nasir and Matt discuss the racial discrimination claims surroundingAirbnb and how it’s handled the situation. They also discuss some practical tips for businesses experiencing similar issues.

September 8, 2016

Nasir and Matt discuss whyAmazon seller accounts are getting suspended and banned without notice and how business owners can rectify this situation through a Corrective Action Plan.

August 25, 2016

Nasir and Matt talk about the accusations surroundingfashion giant Zararipping off the designs of independent artists like Tuesday Bassen and howsmaller companies can battle the industry giants.

August 18, 2016

Nasir and Matt discuss Brave Software’s ad replacing technology that has caught the eye of almost every national newspaper and has a potential copyright infringement claim looming. They also welcome digital marketing expert Matt Michaelree to speak on the specifics of what Brave is attempting to do and whether it has the answers moving forward.

July 28, 2016

Nasir and Matt discuss the sexual harassment lawsuit filed by Gretchen Carlson against Fox CEO Roger Ailes. They also talk aboutthe importance of sexual harassment training and properly handling such allegations in the office.

July 15, 2016

Nasir and Matt talk about the changes at Starbucks that have led to many disgruntled employees and customers.

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We do all of this without utilizing the traditional billable hour model. You pay for the value we bring, not the time spent on calls, emails, and meetings.

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