The Labor Market According to Littler: ‘Like a Light Switch Going Off’

[WSJ Law Blog]

For those employment lawyers who’ve managed to evade unemployment, skyrocketing layoffs could mean a great 2009.

The Law Blog’s brother blog, Independent Street, which carries “News, trends, tidbits and tools for and about entrepreneurs,” notes that the rise in layoffs and downsizings may lead to a jump in employment- discrimination lawsuits against companies.

Last year, employment-discrimination charges rose 15%, according to a story in Human Resource Executive. But as the job outlook for the coming year looks increasingly grim, the unemployed may feel desperate and thus more likely to look for compensation — which is good for the lawyers.



Like Littler Mendelson’s Garry Mathiason. Mathiason told Real Time Economics — another LB brother blog — that he estimates the firm is consulted on roughly half the layoffs in the U.S. When Littler’s layoff-related business surged last fall, Mathiason conducted an informal survey of his colleagues and found the firm was handling around a million prospective job cuts. That suggested two million for the nation as a whole. When the government released its official numbers in January, U.S. employers had eliminated 1.5 million jobs in the fourth quarter – close to what he expected.

Real Time Economics continues:

Now the bad news. Mathiason says Littler is working on roughly two million additional prospective layoffs this quarter. Applying his admittedly unscientific methodology, Mr. Mathiason estimates the U.S. could lose around three million jobs from January through March, or one million a month. That’s equivalent to all the job losses in 2008. The government estimates that 600,000 jobs were lost in January. . . . the size and speed of these cuts has surpassed those of previous downturns, says Mr. Mathiason: “You go back to other recessions, there was a slower reaction time on the part of employers. Historically, it hasn’t been like a light switch going off.”