Protecting your company in tough economic times: before, during and after layoffs 10-29-2008
- By Rita Risser, attorney at law

Although cutting costs are on everyone's mind, it is important to consider the impact of your cost cutting and the true costs of your decisions. If you decide to cut jobs and get sued because you didn't do it correctly, it will cost you more in the long run.

If your organization currently is not planning a layoff, it is a good time to make sure all your documentation is in order. Review the performance appraisals of all your employees. Do they accurately reflect their current performance? If not, sit down with the employees and discuss any shortcomings, and document that discussion in writing. Now is an important time for all employees to be working at 100%. If they aren't, counsel them.

HR also should make sure that all layoff policies and procedures are current and legal.

If your HR staff has not handled a layoff before, make sure they know how to do it. They can't just give managers a set of criteria and expect them to implement it. Managers need to be trained to properly document each decision they make. Their rankings must be done strictly and fairly, cite legitimate business reasons and be based on the performance appraisals. You also must conduct adverse impact analysis on the results.

Legitimate business reasons must be applied in non-stereotypical ways. Earlier this year, the U. S. Supreme Court ruled in favor of a group of employees over the age of 40. The company laid off 31 employees - 30 of them over age 40. The employer picked them based on "reasonable factors other than age," namely, manager rankings of employees based on "performance," "flexibility," and "critical skills."

Although these factors may sound neutral, obviously they can be applied in stereotypical ways. For example, we often find managers assume that older employees are not flexible. The Supreme Court held the company had to prove that each employee was not picked based on illegal stereotypes. Meacham v. Knolls Atomic Power Laboratory

The layoff also must be implemented consistently. A 2006 case involved a state agency that laid off 5 African-American women, and 1 Caucasian man. The women were laid off effective immediately. They were given thirty minutes. Their belongings were inspected as they packed. They did not have an opportunity to say goodbye to their co-workers, some of whom cried and asked if they were being arrested.

In contrast, the white male was given a month's advance notice. He was allowed to come to the office at his convenience to receive his termination notice. He was not monitored as he cleaned out his desk and he was permitted to walk around the building freely to say goodbye to his coworkers. The company lost the case of race discrimination.

We at Fair Measures have gone through a few economic hard times in our 22 year history and have a range of resources that can help. Our Layoff System provides a step-by-step guide for HR staff. We can provide live training for your HR staff and/or managers on conducting layoffs. We focus not only on the legal requirements but also on how to show respect to employees during the process so they will not feel motivated to sue.

You can also check out our web site for the answers to sticky layoff questions such as:

• We downsized an employee right after we hired one - is that legal?
• Is it legal to do forced ranking based on employee "energy" and other intangibles?
• Our layoff list has a high percentage of minorities. Is that illegal?
• Are there special rules for laying off H-1B visa workers?
• How can we get RIFfed employees to sign releases?

Once the layoff is complete, how will you ensure your employees stay engaged? It is still important to ensure a respectful workplace and that your managers manage within the law. Smart companies use slow times to do the training they don't have time to do when they're busy. A small investment in your remaining employees now will help insure they remain loyal to your company. Employees appreciate training as a perk that gets them out of the office, interacting with others, enjoying the day while learning valuable career skills.

Finally, companies in California need to keep in mind they are still required to provide the mandatory harassment prevention training next year. Connecticut and Maine employers also must do harassment prevention training for new managers within the first six months of hire or promotion. We have updated our webinar for 2009.

What you should do: For both the employees you lay off and those who remain, treat people the way they want to be treated. Remember, this, too, shall pass, and you want to be an employer who creates a respectful workplace.

 

Information here is correct at the time it is posted. Case decisions cited here may be reversed. Please do not rely on this information without consulting an attorney first.