Taking legal action against your employer after a mass layoff might seem like a good idea, but it’s likely to be a waste of time and money. It could also damage your reputation and future job prospects. Mass layoffs can be a shock, especially if you’ve been out of work for a while. They can bring back memories of the 2008-2009 financial crisis, when many companies, including mine, had multiple rounds of layoffs.
I remember trying to help a friend who had just had a baby and was laid off by Lehman Brothers. He was left with about $25,000 in unpaid corporate expenses. I tried to get him a job at my company, but he didn’t make a good impression on one of my colleagues, and our friendship suffered as a result.
I managed to survive the layoffs at my company, and in 2012, I even asked to be included in the next round so I could get a severance package. Looking back, getting laid off was one of the best things that happened to me, even though it didn’t seem like it at the time.
When Elon Musk took over Twitter and laid off over 3,500 employees, social media went crazy. Many people thought he had illegally laid off thousands of employees without proper notice. A trial lawyer named Lisa Bloom tweeted about this, pointing out that California’s "WARN" law requires companies to give 60 days notice of a mass layoff. She suggested that Twitter employees could sue the company for violating this law.
While Lisa made some good points, I think suing your employer for "unlawful" termination is likely to be a net negative. This is true not just for Twitter employees, but also for those at Facebook and other companies that have announced mass layoffs.
In California, most employees are considered "at-will," meaning they can quit their jobs at any time, and employers can lay them off at any time for any lawful reason. This is true in all states except Montana, although some states do have exceptions.
If you’re laid off as part of a mass layoff, you should receive two months of pay as severance at minimum under the WARN Act. You have several options at this point: you can sue your employer, ask to stay on longer and receive your WARN Act pay later, or stop working, collect your WARN Act pay, and look for a new job or take some time off.
If you choose to sue your employer, you’re likely to lose, and the only ones who will benefit are the lawyers. Future employers might be wary of hiring someone who has sued a previous employer, so it could hurt your job prospects.
Instead of suing, it’s better to come to a mutual agreement with your employer. This requires some forward thinking and planning while you’re still employed. If you quit your job, your colleagues will have to pick up your workload until a replacement is found, which could take months.
In the case of the Twitter layoffs, employees had plenty of time to prepare for what was coming. Elon Musk’s takeover of Twitter had been in the works for half a year, so layoffs or reorganization were likely.
If you’re laid off and your employer offers you WARN Act pay in an at-will state, it’s best to move on and look forward to better days. If you’re interested in negotiating a severance, check out the book "How To Engineer Your Layoff." It’s helped thousands of readers walk away with tens of millions from their jobs since 2012.
