Many companies use return-to-office (RTO) mandates or resignation packages to encourage voluntary attrition, hoping to reduce headcount without resorting to layoffs. While these strategies may seem like a smart way to cut costs, they come with significant legal and compliance risks.
Employers must carefully navigate discrimination laws, constructive discharge claims, and severance agreement regulations to avoid potential lawsuits or reputational damage.
1. Constructive Discharge & Wrongful Termination
If employees feel forced to resign due to an undesirable work environment, they may claim constructive discharge—essentially arguing they were pushed out rather than choosing to leave voluntarily.
Courts may view sudden RTO policies or intentionally unpleasant working conditions as an attempt to skirt wrongful termination laws. If proven, companies could face lawsuits for wrongful termination, discrimination, or retaliation.
2. Discrimination & Disparate Impact (EEOC Compliance)
RTO mandates and voluntary separation programs may unintentionally impact certain groups disproportionately. For example:
- Older employees may struggle with RTO due to health concerns or long-standing remote work arrangements, leading to Age Discrimination in Employment Act (ADEA) claims.
- Disabled workers may need reasonable accommodations under the Americans with Disabilities Act (ADA), including remote work options.
- Women and caregivers who rely on remote work for work-life balance may face an unequal burden, leading to potential gender discrimination claims under Title VII.
3. Severance Packages & Release Agreements
Companies offering resignation incentives must ensure their severance agreements comply with laws like the Older Workers Benefit Protection Act (OWBPA).
For example, for employees over 40, such agreements must:
- Be written in clear language.
- Provide at least 21 days to review the offer.
- Give seven days to revoke their acceptance
Failure to follow these rules can make waivers unenforceable, allowing employees to accept severance and still sue the company.
4. WARN Act & Mass Layoff Considerations
Even voluntary attrition could trigger Worker Adjustment and Retraining Notification (WARN) Act obligations if a large number of employees are affected. For instance, if 50 or more employees at a single site leave due to an employer-driven initiative, it may legally qualify as a mass layoff requiring 60 days’ notice.
While voluntary attrition may seem like an easy workforce reduction strategy, failing to consider compliance risks could lead to costly legal battles and reputational damage. Here we’ve offered some general guidance and points to consider. But companies should always consult legal counsel to fully understand the legal and compliance risks applicable to their organization.
Lin Grensing-Pophal is a Contributing Editor at HR Daily Advisor.
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