Yahoo is planning to let go of 1,600 employees worldwide. As Yahoo is deciding who will lose their jobs, critics are questioning whether the company will classify the employees as laid off, or fired with cause. Although the end result is the same, how Yahoo goes about the terminations is very important legally.

It is important how Yahoo chooses to classify its terminated employees, as employees who are laid off have legal rights under California law that employees who are terminated for cause do not have. Under the California Worker Adjustment and Retraining Notification Act (the WARN Act), large employers must give the state and the employees who will be laid off 60 days’ notice before any layoffs of 50 or more people begin. The law is designed to help workers have time to look for other jobs and possibly apply for government benefits.

However, many large companies, especially tech companies, would rather classify employees as fired for cause than laid off, so that they do not have to give workers the required notice by law. There are several reasons companies do not want to give employees the 60 days’ required notice.

First, normally when a company decides to make job cuts, it does not want to wait 60 days – instead, it wants to make those cuts immediately. Also, if employees are notified they will lose their jobs in 60 days, they can become very unproductive during those 60 days, and may even steal from the company or find other ways to harm the company. Finally, company morale can suffer during layoffs – employees may worry they are next, and there’s usually a lot of media attention on the company. If workers are fired for cause, normally there is not any media attention, and other workers may feel more secure in their jobs.

In 2014, Yahoo came under fire for allegedly violating the WARN Act. The company terminated 600 employees, but only reported 59 of those terminations as layoffs. Most of the rest of the employees were fired after being labeled as poor workers through employees evaluations. The company never reported those firings to the state since they were not classified as layoffs. One of the employees who was fired is now suing, claiming he was unfairly fired for a poor performance when there was nothing wrong with his work.

Yahoo recently filed the legally required notice under the WARN Act for over 100 employees in Sunnyvale. Yahoo has also said it plans to reduce its workforce by 2,700 workers. It’s currently unclear who will be terminated and how it will classify those terminations, but it’s very likely that the company’s actions will be closely scrutinized by the media.

Although workers are given a number of protections and benefits under both state and federal law, employers will often find a way around those laws. For example, if an employee becomes pregnant and an employer is worried that she may miss too many days of work, the employer may fire her and blame the firing on a bogus performance review, since it is illegal to fire an employee because of pregnancy.

If you believe that your employment rights have been violated, it’s important that you speak with an employment law attorney. At Liberty Law, Micha Star Liberty and Seth I. Rosenberg believe that employers who fail to give their employees the required legal protections should be held liable. If you are in the San Francisco – Oakland area, call the Oakland employment law attorneys at Liberty Law at 510-645-1000 or 415-896-1000. We will be happy to provide you with a free consultation on your case.



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