Layoff’s Tips & Trends

If you’ve been laid off recently, you may be shocked and scared. If you’re

the boss who has to lay people off, you may be heartbroken that you have to dump

some of your best people.

In this, as in many things, knowledge is power. While what follows is not

legal advice, but offered for educational purposes only, it may help to understand

some basic tips and trends about layoffs.

At this writing, the January total for layoffs in this country is at least

150,000, according to the Chicago-based executive search firm Challenenger, Gray

and Christman. Jobless claims hit a 26-year high of 589,000. Caterpillar, Pfizer,

Home Deport and General Motors were just a few of the giants with January

surprises. If you’ve been laid off, or you’re a boss doing layoffs, here are some

basic tips.

Lay-offs are, unfortunately, common in these days of the poor economy,

downsizing, right-sizing, and mergers and acquisitions. If you’re over forty and

have toiled for years in corporate America, you or someone you have worked with

has most likely been laid off at least once.

If you’re wondering about what your employer can or cannot do, what

follows are the basics.

Under the WARN Act, the company must give sixty days advance notice of

a mass layoff or plant closing. However, the law applies only to companies with

100 or more employees and only to certain types of layoffs. Government or union

employees may have even more rights in this regard.

In general, most courts will not second guess layoffs or reductions in force

(RIF), even if you think it’s wrong, since they have a right to make bad business

decisions, as long as they follow the law when doing it. There are three areas

where courts might find a wrongful termination:

1. If the layoff was in fact not legitimate

2. If there was no valid criteria for the layoff; or

3. If some groups protected under discrimination laws were adversely and

disproportionately impacted.

As to the first exception, if a laid off employee is replaced within six

months, the RIF looks suspicious. Courts will sometimes find wrongful

terminations here, finding that the layoff was just an excuse to get rid of selective

employees.

Some companies have written policies that establish criteria for selecting

employees for layoffs such as seniority, job titles, or merit. All of these are legal as

long as they’re applied

consistently and are backed by documentations. Criteria

must be based on legitimate business decisions and should be in writing. If the

criterion isn’t applied consistently or could be viewed as discriminatory, a court

might consider the termination wrongful.

If you believe that you’ve been picked to be laid off because you were over

the age of forty (age discrimination), or because of your sex, race, pregnancy or

other protected characteristic, you may have additional rights to pursue.

Age discrimination, for example, is the fastest growing type of

discrimination case in federal courts these days, partly because of layoffs. What

happens is that companies decide to lay off workers to cut costs. They start looking

at the salary numbers and notice that older workers are the most expensive.

Someone comes up with the bright idea to lay off the most expensive workers; they

do and then seem surprised when they’re hit with a class-action age-discrimination

case. Workers frequently win these cases, especially if they’re in a workplace–

which is common–where there are lots of “jokes” about age.

Although it’s extremely difficult, keep your cool and ask for details. Ask if

they can keep you on the books for some period of time while you search for

another job. Ask if you can continue to use your office. Ask what severance

package they have in mind, if any. Ask if you can have the company pay for

outplacement counseling. Ask for their cooperation in maintaining your health

insurance, if you have it, through COBRA (Consolidated Omnibus Budget

Reconciliation Act). Ask (although they may not be willing to tell you) for the

details on the layoff in general–especially for information about others who are

being laid off. Ask for a reference letter. While they may not be willing to give you

any of these things, it never hurts to ask!

If you have the sad task of doing layoffs, what follows are the basics.

In some states and companies, a layoff means that you have to offer the

employees who were laid off their jobs back if they become open again. A RIF

(reduction in force) refers to a permanent reduction.

Obviously, you should follow all your companies’ procedures and policies in

doing the layoff. Courts will generally not question whether there was a business

reason for the layoff. Some traps, however, include situations in which the layoff

isn’t really a layoff but an attempt to get rid of older or more expensive workers.

Even if you don’t believe this is the intent, you need to look at the numbers to

make sure that there’s not what the courts call a “disproportionate impact” on the

oldest workers or any other group with a particular protected characteristic.

The courts will question things if you don’t consistently apply the criteria for the

layoff or if the layoff isn’t legitimate. If the laid off employee is replaced within

six months, the RIF looks suspicious. Even if you give the new employee a

different job title, it looks phony.

If you have a layoff and then your budget is restored, you should call the

people you laid off and give them an opportunity to come back to work. Even if

you’ve restructured the job, you should interview the laid off employees as a

matter of fairness; they may be able to do the new job.

If you’re using a legitimate layoff to get rid of a non-performer, you should

have documentation to back up the non-performance.

You should have legitimate criteria for the layoff. The criteria should be in

writing, and it should be company-or department-wide. Allowing one manager to

decide about his or her own criteria is dangerous.

When you talk with your employees about layoffs, it should be very simple.

Tell them the truth, whatever the legitimate business reason might be. If you can

offer severance packages and outplacement counseling, you will save money and

heartache in the long run. Employees are less likely to sue if they’ve received these

benefits.

Last but not least, express compassion. It’s a big deal for most employees to lose

their job. Tell them how sorry you are, and let them express whatever emotions

they have. Studies consistently show that employees who are treated with dignity

and respect tend to sue less often than other employees. Even when you’re

delivering the bad news you can act humanely.

Copyright © 2008. No part of this material may be reproduced without written permission from Lynne Eisaguirre,

Workplaces That Work, 303-216-1020, Lynne@Workplacesthatwork.com,

www.workplacesthatwork.com