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Layoffs – advice for GCs on how to manage them

Dallas lawyer Michael Maslanka writes in Texas Lawyer about how to manage layoffs, including suggestions for drafting litigatable releases (hint: simpler is better, and no release is better than a spurned one).

Here’s the drill: If offering two weeks severance only, forget the release, and just give the money. A release offered and refused is admissible as evidence of consciousness of guilt. …

A more fundamental release challenge is that lawyers assume one size fits all; they believe a release used 10 years ago is good to go for today, and they try to sound smart by drafting densely written, 20-page releases. It’s as if there was one release drafted in the misty past, handed down from generation to generation, and used again and again without question.

Here’s the deal:

  • Make it simple with bullet points and check marks, and boil it down to a few pages. The goal is to get the employee to sign it, not show legal virtuosity.
  • Write in active voice, not passive. Releases saying that the employee has been advised to consult an attorney are invalid; the release must say that the company advises the employee to consult.
  • Think ahead: Extinguish any outstanding issues on reimbursements owed and commissions due; but don’t extinguish all obligations, such as an existing covenant not-to-compete, with a merger clause.

(Extra paragraphing and bullets added.)

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