Lay Off Policies and/or Law

Grinch · March 2004

[font size="1" color="#FF0000"]LAST EDITED ON 03-23-04 AT 12:02PM (CST)[/font][br][br]Our company recently went through yet another lay off. This one caught most everyone by surprise and really went deep. Average time for most ee's with the company is probably 2-4 years and this lay off got a lot of ee's that have been around for 7, 8 even over 10 years.

Admitedly the company hasn't always done the right thing primarily because things sometimes happen to quick to stop and think.

Here's a situation that may come up with this lay off. For example, a department of about 5 ee's lay's off 1 employee. This ee hasn't had a performance appraisal in over 4 years (not unlike many Management staff company wide). They don't have any issues and sadly, if the Director of this department has ever had a problem with this ee's performance, it's never been voiced in any way. The only feedback ever given according to this ee is casual but positive. All around a well thought of ee.

My question is somewhat in general. If you have a department of X number of ee's that all are expected to perform the same job, there are no performance ratings (at least that any of the ee's know about) that can be used for stack ranking, can a Manager select an ee to lay off, without any appearent justification? I know this may go much deeper, but I wanted to get some feedback so let the questions and comments fly.

deniseE · March 2004

anytime you lay off employees a methodology should be developed in advance and not deviated from in any way.

For example...you could come up with a total number of employees and ratio them out among the different areas so that each area loses the same percentage. And then decide that those with the least amount of service will be let go.

The problem with your situation is that you don't have a methodology and it will be hard to defend the thought process if you need to do it.

Don D · March 2004

As I read between the lines of your question, I think you already know the answer. Denise is right. Always establish the methodology. Go by seniority, division, location, unit, job title, department or any combination of the above; but, in the absence of some glaring performance or ability fact, go by seniority within the group you're targeting. Lay it all out first and take a clear look at the demographics of whom the layoff will hit, then evaluate your vulnerability should challenges follow.

Note: The preceeding is my personal opinion and has no value beyond that. Although it may be 'sorta offensive' or 'indeed offensive' to someone out there, it is offered without regard to that possibility. Should you find yourself alarmed by my post, you may privately mail me to protest or you may alert the principal's office. x:-)

Gillian3 · March 2004

The other posters have told you what should be done. Since there was no methodology and if an issue arises after the layoff, the question will be - was the layoff a result of discrimination in its various forms or any other type of prohibited decision making? There isn't any law saying that there must be a methodology in a layoff, it is just that without one it is much harder to prove that there was no discrimination or other improper decisions.

Grinch · March 2004

Thanks everyone for your feedback. I think just about everything was what I knew in my gut.

As usual, there may be more to this. The rumor mill has it that an individual that was laid off may be consulting an Attorney before signing a standard severance and release document. Most everyone just signs it to get their severance check and move on but appearently this person isn't in a rush and it's getting noticed. Appearently they have one simple question that may be hard to address and I think they know that, which is why they may or are retaining or consulting an Attorney.

I'm told by an employee that keeps in touch with them (yes hear-say, but very reliable and the ex-ee is being and has been very professional), that they want to know how it was that they were selected to be laid off rather than someone else in the department. They are not sure if they should just ask someone including their former Manager, or have an Attorney involved to ask the question. The only safty net may be that this person was the newest to the department, yet has been with the company longer than any of them. They were transfered to the department as the result of a reorg and layoff occured close to 2 years ago. I'm told this person is now admitting they never felt "welcome" as they were transferred in, rather than interviewed and accepted as the others were.

Many of the layoffs truly were jobs being eliminated therefore each person, or department was 100% cut making it obvious and clean. In this case, and 1 or 2 others, it's a case of only part of a department cut or some of many equal jobs that were cut. What I'm afraid of is that the question of how these specific ee's were selected to be rif'd rather than someone else in the department cannot be answered consistantly and the company may be at risk.

Sorry for the long post. We've gone through so much as a company and some of the individual situations are really getting to me espacialy now that so many valued, long time ee's were affected.

Any more thoughts on this?

stilldazed · March 2004

RIFs are hard. I've never seen one from the HR side, but I have been part of the staff left behind many times in my life before becoming an HR director. I was with an employer who cut their staff from 2,200 to about 640 in 10 years. Without the RIFs, turnover was low single digits. By the last one prior to my departure from the company, remaining employees had 27+ years of service. Almost everyone with shorter time was gone. (Obviously, a major factor in the methodology was seniority.) The day notices went out always felt like a funeral that lasted all day long. Nobody wanted to talk to anyone else. EMTs would be on alert for employee panic/anxiety attacks, and would get called to respond in some instances. The best thing that employer ever did was get all notices out in a single day and release RIF'd employees with 60 days of wages rather than keep them on the payroll for 60 days. All of us who were left behind were more than ready to get that day behind us and get back to business on the first day back after the notices.

Smurf · March 2004

I would also review the payroll practices in your state. I do believe there is usually a time requirement for giving an employee their "last check" and as you state above, without the employee signing the document they do not get their severance check (different laws may apply for severance vs pay for work checks however).

Grinch · March 2004

Yes that's true, and beleive it or not, they "forgot" to get the final check cut which was simply their final pay period and PTO payout. Appearently they contacted someone inquiring and low and behold, someone jumped and cut a check and had it in Fedex within hours. The company was 2 days overdue getting that paid.

The severance is not subject to that same rule though.

I'm still concerned and curious if they have a case to make for their selection to be laid off as well as a few others. A few people have that not so good feeling in their gut about how they were handled......

Don D · March 2004

Certainly the employee has a case. It's just a matter of whether or not it will be bought when shopped to a jury, should it get that far. And, to your comments regarding the 'rumor' that the terminated ee has contacted a lawyer; I would certainly hope she/he has. Nobody should sign a severance agreement without benefit of legal counsel, unless they are extremely familiar with such documents and their ramifications. A signee is agreeing to quite a lot when those letters are signed, especially those that include FMLA and Age claim agreements. In fact I've never handed out such an agreement that did NOT suggest the employee contact an attorney.

Note: The preceeding is my personal opinion and has no value beyond that. Although it may be 'sorta offensive' or 'indeed offensive' to someone out there, it is offered without regard to that possibility. Should you find yourself alarmed by my post, you may privately mail me to protest or you may alert the principal's office. x:-)

Whatever · March 2004

And, as a matter of policy, never allow the ee to sign the severance agreement as soon as they receive it. Whether or not the ee reads the agreement or not ( or hires an attorney or not) is not your business. However, you don't want it to appear that the company was taking advantage of an ee.

Gillian3 · March 2004

If these separation agreements do not contain language that advises the employee that they can contact their own counsel, the agreements are probably invalid.

Grinch · March 2004

Actually they advise that the ee SHOULD consult an attorney but oddly enough, 99% of the time they just sign them right then and there. I guess no one should get nervous about them consulting an Attorney, it's just not what everyone is used to. I guess we'll see.....

Thanks again for all the feedback. This is a great site. Always new things to learn and/or new ways to look at things.

Crout · March 2004

> can a Manager select an ee to lay off, without any appearent justification?

Sure...you can do whatever you want. You just have to be prepared to possibly lay out some big dollars in settlement and legal fees as a result of the law suit.

Grinch · April 2004

[font size="1" color="#FF0000"]LAST EDITED ON 04-13-04 AT 12:07PM (CST)[/font][br][br]I wanted to come back and provide an update and get some thoughts.

SInce this post, the ee has sent a question in email to an HR contact. The question was asked and answered by the former Manager and replied to the ee. The ee was told that they were selected to be laid off based on a stack ranking equally within the department. A couple of things come out: 1-there are 2 job grade's of ee's in this department that are 2 levels apart and they held one of the lower grade jobs. They were graded against other higher grade (higher compensated also) ee's although it appears they are treated equally as far as expected work type, which is scary in itself. 2-the lay off was executed as a business decision and the doc's presented to all laid off ee's specificly stated it was not based on performance.

So the ee was laid off and presented doc's stating the lay off was not based on performance yet this ee has now been told that they were selected based on stack ranking against ee's that are higher banded and more experienced in that job/function. The criteria they were told was used is valid for the job, but was created for this stack ranking and never used in any way for feedback or performance eval's or any type of communication. Playing devil's advocate, the ee's in this department have never been made aware that this criteria was critical to job success nor was any performance expectation conveyed.

Sorry for the really long post but I'm perplexed. I am not directly involved nor responsible thankfully, but something about this situation is really sticking with me and it just doesn't feel right.

Any comments are welcome.

Don D · April 2004

You can lay them off based on green eyes as opposed to blue if you like. The fact that nobody was told how the layoff proceeded is irrelevant, but may have to be detailed in court later. It appears everybody was treated equally, even though with odd methodology, and I don't see any discrimination in her/his selection. Retaining more experienced people who happen to be at higher pay grades is not discriminatory. The thing you have to worry about is whether this person is a member of a protected group and was laid off while people were retained who he/she can show are less qualified.

Grinch · April 2004

What you say makes sense. It may just be a case of "it could have been handled better" but stack ranking 2 different job levels equally doesn't seem right. The higher job level should be expected to have more experience and have more responsibility or be expected to carry out a job function that requires more specialized training. If it was a stack ranking of the 2 ee's at the same job level it would seem fine.

As it turns out this ee was the oldest ee in this department (as well as had the longest tenure), and is over 40. Only one other time has this department been affected by a lay off and the ee that was laid off at that time was also over 40 and at the time, the oldest in the department. There could be a perception that the other ee's are more flexible for travel including extended and international travel since they are young and don't have children. But I never thought that age would have been a factor, but that's always an angle and how knows what was actualy in the mind of the Manager. The other ee's age's start at 25 and go up top about 31 and the laid off ee is 41 or 42.

I more than ever, question the way things are done with this company and to make it worse, the company is the process of being sold and the sale should close any day. I'm sure this would not make the buyers happy.

Don D · April 2004

Indeed someone might be called upon to explain every thought that went into the decision to RIF the senior person who happens also to be the oldest in the department. The first question to the witness might be, "Tell me, Mr. Manager, exactly how was Tom Johnson targeted for elimination in your Reduction In Force?"

Lay Off Policies and/or Law

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