1. LEGAL UPDATE Jen (Vogt-Lowell) Dibble, Esq. Allen Matkins Leck Gamble Mallory & Natsis LLP

2. Employee Free Choice Act “to amend the National Labor Relations Act to establish an efficient system to enable employees to form, join or assist labor organizations, to provide for mandatory injunctions for unfair labor practices during organizing efforts, and for other purposes”

3. Employee Free Choice Act Amend the National Labor Relations Act – Prohibit secret ballot elections as the method of determining employee support for union representation – Mandate binding arbitration if the parties cannot agree to a contract – Enhance penalties on employers who resist the unionization of their employees unlawfully

4. Reductions in Workforce Concerns – Violation of federal and state discrimination laws – Breaching contractual obligations Legitimate RIF – Based on elimination of positions not particular employees – Not subterfuge for termination of “problem” employees

5. Preliminary Considerations (1)Consider Alternatives to Layoff/Termination – Offer incentives for voluntary termination in exchange for a release of all claims – Other Cost-Cutting Measures – Transfers and Recall Rights (2) Establish Selection Criteria for Termination – Neutral Criteria (ex. Ratings formulas based on EE qualifications, abilities, productivity, lengths of service) – Typical Criteria for Retaining/Laying Off Employees – Prohibited Criteria

6. Typical Criteria for Retaining or Laying Off Employees Merit – Performance – recent evaluations? Versatility – Ability to perform multiple tasks Seniority – Typically in CBAs governing union employees – Preference for “meritocracy”? Salary – Careful with older workers

7. Prohibited Criteria Age Sex, race, color, religion or national origin Pregnancy Gender and gender identity Marital status Sexual orientation Ancestry Military service A pension about to vest Disability or Medical condition Filing of a Workers’ Comp claim Employee’s exercise of a protected right

8. Preliminary Considerations (3) Notice -COBRA, WARN and Cal-Warn, CBA, employment contract, personnel policy (4) Checklist: RIF Guidelines for Minimizing Litigation Risk 1) Articulate business need for RIF and business goal to be accomplished 2) Can RIF be avoided? 3) RIF limited to certain depts or applied across- the-board?

9. RIF Checklist Continued 4) Identify positions to be eliminated 5) Set the criteria for selection 6) Rank employees 7) Check layoff list for adverse impact by protected category 8) Any complainers? (WC, whistleblowers?) 9) Should additional compensation be provided in exchange for a release of claims? 10) Does RIF trigger WARN or Cal-Warn notice requirements? 11) Provide COBRA notice 12) Consider transition assistance – ex. Outplacement services 13) Train managers on communicating information to workforce and how to manage reduced workforce after RIF

10. COBRA Subsidy American Recovery and Reinvestment Act of 2009 (ARRA) – Obama signed into law 2/17/09 Provides for premium reductions and additional election opportunities for health benefits under COBRA for “assistance eligible individuals” Eligible individuals pay only 35% of their COBRA premiums The premium reduction (65% of the full premium) is reimbursable to the employer as a credit against certain employment taxes

11. Flexible Work Schedules Alternative to traditional 9 to 5, 40-hour work week Allows employees to vary their arrival and/or departure times Under some policies, employees must work a prescribed number of hours a pay period and be present during a daily "core time" Agreement between employer and employee