INSIDE THIS ISSUE:
1) The Fifth Circuit Enforces Employment At-Will, Choice of Law and Waiver Agreement Against a U.S. Citizen Employee Who Worked in Mexico; 2) COVID-19 and Cross-Border Furloughs and RIFs; 3) ILS Sponsors Two CLEs at Texas Bar Annual Meeting; 4) Annual Institute Update; 5) Human Rights Essay Contest Deadline Extended.
|
|
ILS CONNECTION MONTHLY NEWSLETTER | May 2020
|
|
COVID-19 and Cross-Border Furloughs and RIFs
By Christopher V. Bacon, Counsel-Labor & Employment, Vinson & Elkins LLP
|
Most global human resources managers for multi-national corporations are well-aware of the challenges of terminating a poorly performing expatriate employee who has been working at a company affiliate outside of the United States. Given the complications involved, many companies will typically try to relocate the employee back to the United States before terminating employment if the employee is a U.S. citizen or permanent resident who worked for the company in the United States prior to being transferred overseas.
After all, it’s usually much easier to terminate employees in the United States because most non-union employees in the U.S. are “at-will” employees who can be terminated without cause so long as the decision is not motivated by unlawful discriminatory or retaliatory motives. In many countries, no-cause layoffs are either illegal or the employer is required to pay separated employees a statutory severance—often substantial in amount—which is usually based on the employees’ seniority. There is nothing more frustrating for an employer than to be sued in a foreign court or tribunal by an ex-employee who has just been paid a generous severance only to learn that the employee’s release of claims may not be enforceable in the foreign jurisdiction. The risk of this happening increases if the terminated employee happens to a citizen of the country where he had been assigned.
During the last few weeks, employers in the United States have been making agonizing decisions about layoffs and furloughs for their U.S.-based workers, and these decisions have raised many complex legal questions: Do we have to provide WARN notices? Can the furloughed employees remain on our health plan? Do we have to bargain with the union? Are we better off letting our employees take advantage of the temporary expansion of unemployment benefits under the recently-enacted CARES Act? But because COVID-19 has affected the global economy, U.S. companies that are laying off, furloughing or reducing pay for their U.S. workers are also thinking about doing the same with employees—some whom are U.S. expatriates—who work for their foreign operations.
In addition to the usual concerns about the applicability of foreign labor and employment laws that employers must contend with when terminating a single employee, multi-national employers considering layoffs or furloughs of employees assigned to foreign affiliates will also need to think about other countries’ legal requirements for conducting reductions-in-force or mass layoffs. While other countries often do permit reductions or redundancies for economic difficulties, companies are frequently required to negotiate the reductions with unions or works council. In some countries, failure to negotiate the decision with the works council can prevent any reductions from taking place. In certain countries, companies must also obtain government approval before proceeding. Given that most countries have more employee-friendly laws than the U.S., companies should not be surprised if expatriates avail themselves of legal remedies in the country of their foreign assignment if they are included in a layoff.
U.S. companies with employees in other countries should also keep in mind that new laws have been enacted in many countries in response to the COVID-19 pandemic that might make it more difficult to terminate employees at this time. Argentina, for example, typically allows terminations of employment contracts for “force majeure” reasons. However, the Argentine government recently issued a decree temporarily banning layoffs due to “force majeure” reasons or the lack of work. Similar laws have been passed in Italy and in Spain. On the other hand, Chile recently passed a law that allows employers to temporarily suspend contracts for those employees who cannot work remotely if their office or factory has been closed.
Any company considering layoffs or furloughs in another country should also consider whether governmental benefits are available to employers who retain employees, much like the United States Congress provided in the recently enacted CARES Act. In the UK, for example, the government is helping employers with up to 80 percent of wage expenses, up to specific caps. Other countries are also offering subsidies to encourage employers to retain employees on their payroll even if the employees remain furloughed, including France, Germany, Italy, Canada, Australia, South Korea, and Peru, to mention a few.
Payroll issues aside, some U.S. companies may want to repatriate expatriate employees for health and safety reasons depending on the extent that COVID-19 has affected, or will affect the countries where their employees are assigned, and on ability of those countries’ health care systems to treat any employee who becomes sick. However, as we have all seen, the country-specific data keeps changing. Whereas multinational companies initially focused their attention on their operations in China, then in Italy and other parts of Western Europe, the New York area has been ground zero through much of the month of April—though it appears that the infection rate there is beginning to plateau. On the other hand, the number of cases in certain Latin American and Middle Eastern countries where many U.S. expatriates work for U.S. multinational companies is now growing at a much faster rate.
A further challenge facing employers with employees in countries where the infection rate is growing exponentially is how to bring those employees home. Even when there are still available flights from those countries, adherence to social distancing guidelines on a flight home could be a challenge. Given the risks, travel may not be advisable for an employee whose age or health conditions make them more susceptible to COVID-19.
Suffice it to say, managing a multinational workforce has never been simple, but COVID-19 has compounded the challenge for U.S. companies that operate internationally, especially at a time when companies are looking to retrench, furlough or lay off employees.
|
|
|
Chris’ practice is primarily devoted to litigating employment matters on behalf of private employers. He has tried nearly 40 cases in front of judges and juries in both federal and state court in multiple jurisdictions, and has argued more than a dozen times before the United States Court of Appeals for the Fifth Circuit. Chris often represents clients in governmental investigations and administrative proceedings brought under the National Labor Relations Act, the Occupational Safety Health Act (OSHA), and the Mine Safety Health Act (MSHA). Because of his familiarity with international employment law, and his fluency in Spanish and French, clients in Europe and Latin America seek Chris’ advice when doing business abroad. He also counsels clients looking to hire foreign workers in the United States on immigration issues.
|
|
Texas Bar Annual Meeting | June 25-26, 2020
|
|
|
|
ILS Sponsors Two CLEs on Thursday, June 25, 2020
|
The International Law Section will host two CLEs on
Thursday, June 25th as part of the State Bar of Texas Annual Meeting being held at the
Hilton Anatole in Dallas.
The topics and times are below.
|
|
|
|
Program Agenda | MCLE Credit: 2 Hours of Ethics
|
|
The State Bar of Texas Annual Meeting is fast approaching. The International Law Section will host two CLEs on
Thursday, June 25th. The topics and times are below.
Bilateral Investment Uncertainty: NAFTA vs. USMCA (8:15 a.m. – 9:45 a.m. | 1 Hour Ethics)
This session addresses key bilateral investment considerations given the uncertainty of the surrounding NAFTA and the United States-Mexico-Canada Trade Agreement (“USMCA”). Specifically, this session will address some key distinctions between the NAFTA and the USMCA and considerations for lawyers advising clients engaged in cross-border transactions.
Panelists:
- Doug McCullough, Partner, McCullough & Sudan, PLLC (Houston)
- Bill Watson, Associate Fellow, R Street Institute (Fort Worth)
- Benjamin Torres-Barrón, Partner, Baker & McKenzie Abogados, S.C. (Mexico City)
- Manuel Padrón-Castillo , Partner, Baker & McKenzie Abogados, S.C. (Juárez, Mexico)
Managing Cross-border Investment Disputes (10:00 a.m. – 11:30 a.m. | 1 Hour Ethics)
This session focuses on the most effective means of resolving disputes concerning outbound and inbound investments between businesses operating in the United States and Canada. Panelists will address key issues such cross-border discovery, litigation procedures in foreign courts, the benefits and drawbacks of alternative dispute resolution, and other considerations to protect and enforce your client’s investments and business operations.
Panelists:
- Juan Alcala, Partner, Holland & Knight, LLP (Austin)
- Charles Conrad, Partner, Pillsbury, Winthrop, Shaw & Pittman, LLP (Houston)
- Bob Sills, Pillsbury, Partner, Winthrop, Shaw & Pittman, LLP (New York)
- Gemma Galeoto, Associate, Holland & Knight, LLP (Dallas)
|
|
Update: 32nd Annual Institute | Postponed to November 2020
|
|
Keynote Speaker:
Randy Bagwell, U.S. Army Colonel (Ret) JD,LL.M. Senior Director, International Services, U.S. Programs,
American Red Cross
|
|
The State Bar of Texas
International Law Section Presents
32nd Annual Institute
“At the Intersection of the Technology Revolution &
Human Rights”
Postponed to November 2020 (TBA)
SMU Campus, Martha Proctor Mack Ballroom (Umphrey Lee Center), 3300 Dyer Street, Suite 101, Dallas, TX 75205
|
1.5 days of panels on these topics: Data Privacy, Sustainability in the 21st Century, Blockchain and Cryptocurrency, Brexit, and coverage of topics relevant in the Energy and Natural Resources, Manufacturing and Healthcare industries.
|
|
|
The Annual Institute is being presented in partnership with
|
|
Price includes 1.5 days of CLE, continental breakfasts, lunch on day one and closing reception.
|
|
8 Hours of MCLE Credit including Ethics - Approval Pending
|
|
Early Bird Pricing Before March 15, 2020
Member ($200)
Non-Member ($300)
Students ($25)
Council & Action Committee Members ($175)
Government Agencies, Judges, New Attorneys (less than 2 years) ($100)
|
|
Pricing After March 15, 2020
Member ($275)
Non-Member ($400)
Students ($25)
Council & Action Committee Members ($250)
Government Agencies, Judges, New Attorneys (less than 2 years) ($125)
|
|
|
Annual Institute Program Agenda
|
|
Day One Panels:
- Data Privacy
- Sustainability in the 21st Century
- Luncheon with Keynote speaker: Randy Bagwell, U.S. Army Colonel (Ret) JD, LL.M., Senior Director, International Services, U.S. Programs American Red Cross, Washington DC
- Blockchain & Cryptocurrency
- Is AI Taking Over Our (Lawyers’) Jobs?
- Brexit
Day Two Panels:
- Feature presentation by the State Bar of Texas International Law Section's International Human Rights Committee
- Energy & Natural Resources
- Manufacturing
- Healthcare
|
|
Human Rights Essay Contest - Deadline Extended
|
|
|
|
The State Bar of Texas International Law Section has extended the deadline for its annual Human Rights Essay Contest to
May 15, 2020. The competition is open to students enrolled in any Texas law school or Texas residents attending other law schools. Topic is any aspect of international human rights law. No minimum word count required.
First Prize: $1,500 plus publication of essay in our International Newsletter. The winner will be recognized at a future ILS event. For more information, contact Cristina Lunders at
cristinakl@yahoo.com.
|
|
ILS International Newsletter
|
|
In case you missed it, our Winter 2020 Issue is ready for you to download! Go
here
|
|
Call for Articles!
Deadline: June 4, 2020
The ILS is now accepting articles for publication in the Section’s sixth issue of its
International Newsletter
, which is scheduled to be published in July 2020. We are obviously living in extraordinary times. Therefore, we would like to have this edition of the International Newsletter concentrate on the issues related to international law and international crisis. Any topic related to international legal issues is acceptable, but we would like to include articles related to specific topics. Download complete submission guidelines
here
.
|
|
|
Sponsorship Levels:
$7,500 Worldwide Sponsor
$5,000 Continent Sponsor
$2,500 Country Sponsor
|
|
Become an Annual Sponsor!
|
The International Law Section invites you, your company or firm to sponsor the Section’s activities and be recognized for your support at numerous ILS events and publications.
Download
brochure
which explains the various levels of support and benefits available. Only through such support will the ILS be able to provide several CLE presentations, a two-day Annual Institute, a quarterly International Newsletter, and opportunities to travel to a foreign country for CLE and cultural exchange.
|
|
|
|
|
|
|
|
