HR Support on Handling Plant Closures

Editor's Note: Complete plant closings smoothly and in compliance with federal and state law.

Michael JacobsonOverview: A plant closing is a type of downsizing effort employers use to permanently or temporarily shut down a single employment site or even several facilities or operating units in one location, commonly referred to as a "campus." This type of action can occur for myriad reasons including declining economic performance, environmental concerns or natural disasters or the employer's decision to relocate a facility for business efficiency purposes.

Prudent employers often develop a plant closing or downsizing team, which almost universally includes an HR professional, to guide the process of closing a plant from beginning to end. This process includes analyzing the workforce to determine which employees will be terminated using performance-related criteria, reviewing contracts, written policies and procedures to ensure compliance, processing termination benefits like post-employment healthcare and pension plans, and finally, assessing post-plant closing risk to the employer. In that regard, HR professionals often work closely with in-house or external employment counsel to determine if the plant closing will trigger the protections and early notification requirements of either the federal WARN Act or accompanying state legislation. If so, HR professionals may be tasked with preparing notifications and ensuring that outgoing employees receive them within the statutory warning period.

Trends: In addition to the requirements imposed by the federal WARN Act and accompanying state legislation - some of which heightens restrictions for employers, requiring them to notify workers of impending plant closings at lower thresholds - the National Labor Relations Board requires employers with a unionized workforce to negotiate procedures for plant closings in advance. These provisions are typically included in the Collective Bargaining Agreement (CBA), meaning that the employer will have procedures in place for handling a plant closing before the decision to close a plant is contemplated.

Author: Michael Jacobson, JD, Legal Editor

Latest items in Plant Closings

  • Alabama's New Notification Requirement for 'Mass Separations': Employment Law Manual Updated

    Date:
    13 March 2014
    Type:
    Editor's Choice

    Alabama employers that typically use group terminations or layoffs should familiarize themselves with the new regulation.

  • Involuntary Terminations: New Jersey

    Type:
    Employment Law Manual

    In-depth review of the spectrum of New Jersey employment law requirements HR must follow with respect to Involuntary Terminations

  • Involuntary Terminations: Iowa

    Type:
    Employment Law Manual

    In-depth review of the spectrum of Iowa employment law requirements HR must follow in respect to involuntary terminations.

  • Financial Services Resource Center for HR: Terminations and Reductions in Force

    Date:
    28 June 2013
    Type:
    Editor's Choice

    XpertHR's Financial Services Resource Center for HR helps financial services employers handle their most challenging employment issues by bringing relevant resources together in one place for easy access.

  • Date:
    25 June 2013
    Type:
    Legal Timetable

  • Involuntary Terminations: New York

    Type:
    Employment Law Manual

    In-depth review of the spectrum of New York employment law requirements HR must follow with respect to involuntary terminations.

  • Sequestration May Impact Federal Contractors

    Date:
    01 March 2013
    Type:
    News

    If Congress and the White House do not reach a deal on the sequestration,employers with federal contracts should be prepared to take immediate action to deal with drastic cuts in government spending that will result. Federal contractors should anticipate how the sequestration will directly affect their workplace with respect to complying with Worker Adjustment and Retraining Notification (WARN) Act, wage and hour requirements, benefits and immigration status as well as unions and collective bargaining agreement issues. Employers should also expect possible lawsuits from workers laid off due to spending cuts.

  • Transportation Resource Center for HR: Terminations and Reductions in Force

    Date:
    22 February 2013
    Type:
    Editor's Choice

    XpertHR's Transportation Resource Center for HR: Terminations and Reductions in Force helps transportation industry employers handle their most vexing employment issues by bringing relevant resources together in one place for easy access.

  • Retail Resource Center for HR: Layoffs, Reductions in Force and Plant Closings

    Date:
    20 February 2013
    Type:
    Editor's Choice

    XpertHR's Retail Resource Center for HR: Layoffs, Reductions in Force and Plant Closings helps retail employers handle their most vexing employment issues by bringing relevant resources together in one place for easy access.

  • Retail Resource Center for HR: Terminations

    Date:
    20 February 2013
    Type:
    Editor's Choice

    XpertHR's Retail Resource Center for HR: Terminations helps retail employers handle their most vexing employment issues by bringing relevant resources together in one place for easy access.

About this topic

HR guidance on downsizing efforts and plant closings, the typical reasons to close a plant, common HR considerations in the course of a plant closing and planning for post-plant closing risk by complying with federal and state law.