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An HR Lesson from the Presidential Debate

Posted by Molly DiBiancaOn October 17, 2012In: Performance Evaluations, Reduction in Force (RIF), Terminations & Layoffs

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I never discuss politics. Never. I don't have the stomach for it, to be honest, and I avoid the subject like the plague. That said, I did manage to watch part of the Presidential Debate on Tuesday night. There are ample pundits who surely have more insightful (i.e., political) commentary than what I can offer. So I'll gladly leave the politics to others and stick with what I know--employment law. Here's one HR-related lesson that I took away from the debate.

One of the hottest topics of post- debate discussion was Mitt Romney's comment about "binders full of women." I'll admit--when I heard him say that, I cringed. It just sounded so wrong.

But I'll admit that I cringed for another reason. I assume Mr. Romney did not actually plan to say that he'd looked at "binders full of women." Surely he meant to say that he'd reviewed binders full of resumes of female candidates. But, alas, those were not the words that he said. And now he's stuck with the ones he did say.

And that's the lesson for HR professionals. Be careful with your words--they're hard to get rid of once they've been said and even more difficult to escape once they've been committed to paper.

I used to teach a seminar called, "Help Me Help You." The theme of the seminar was effective documentation for supervisors and HR professionals. My slide deck consisted of real-life examples of documentation "done wrong." One slide, for example, showed an excerpt of hand-written notes taken by a supervisor who later became the alleged wrongdoer in an age-discrimination case. He'd taken the notes during a pitch presentation by an outside vendor and had written, "would be good work for young project managers."

What he meant, he explained at his deposition, was that the work offered good opportunities for junior project managers--not necessarily young ones. I have no doubt that his explanation was an honest one. But that didn't make it any less uncomfortable when asked about it by the EEOC attorney who was deposing him.

There are more stories like this than I can possibly recount--although someday I may try if I ever getting around to writing my memoir of life as an employment lawyer. The point, though, is this: Words are cheap. Their consequences can be very, very costly. So choose wisely.

An Unusual Alternative to Layoffs: Vote-Offs

Posted by Molly DiBiancaOn April 17, 2009In: Reduction in Force (RIF)

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What if your employer announced cut-backs but, instead of announcing who would be subject to layoffs, you were giving the task of making the choice.  How easily could you select which of your coworkers you would "vote off of the island"?   Talk about peer pressure. Talk about cubicle wars!

Would you vote for the employee who never carries his weight?  Or would you invoke the Survivor strategy of voting off the strongest competitors--even though it means you'd run the risk that you'd have to do more or that the business would suffer in the absence of its key performers?  image

Thanks to a  new reality show, viewers can live this decision process vicariously.  In each episode of "Someone's Gotta Go'," workers at a struggling business will choose who should get a salary cut or raise and who should be fired based on information about pay and past performance.

Maybe you'd better smile at the coworker in the neighboring cubicle a little more often these days.

Delaware employers can learn more about other, more humane, alternatives to layoffs at our annual Employment Law Seminar on April 29.  (Learn more about the employment-law seminar here and register for the seminar here).

DuPont Puts Flexible Downsizing to Work With Voluntary Unpaid Leave

Posted by Molly DiBiancaOn April 15, 2009In: Alternative Work Schedules, Reduction in Force (RIF)

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Delaware's largest industrial employer is asking its salaried workers to take at least two weeks' unpaid leave.  75 of the company's senior leaders announced that they will take three weeks off without pay in response to the current market conditions.  There are a number of reasons to consider initiating this type of voluntary program instead of involuntary layoffs.  According to the article reported by the Wilmington News Journal:Dupont

Employers appear to be favoring voluntary programs, according to a February survey by Watson Wyatt consulting firm. Eleven percent of the 245 U.S.-based companies surveyed have instituted mandatory furloughs, while another 6 percent expect to launch a program in the next 12 months.  By comparison, 10 percent already have had voluntary furloughs and another 9 percent are expected to ask for voluntary furloughs within the next 12 months, the survey said.

A DuPont representative cited the current preference for flexible work schedules as one reason for its decision to initiate the voluntary program.  Another reason was that it made compliance with foreign laws easier than if an involuntary layoff program had been utilized. 

For those of us on the East Coast, where summer is king, now may be an ideal time to consider offering a flexible-downsizing initiative.  If your organization is trying to cut labor costs without having to layoff its valued employees, you may want to think about unpaid leave, voluntary furloughs, and reduced-schedule work week.  If your employees traditionally flock to the beach on Friday afternoons, they may jump at the chance to work a four-day week for 4/5 of their normal pay.  Even a temporary program for the summer months may be enough to enable your organization to stave off unwanted involuntary reductions.

I'll be conducting an audio conference on layoff alternatives in June for M. Lee Smith Publishers.  Be sure to check out the HR Hero website for lots of resources on employment-law and human-resource topics, including information about voluntary and mandatory furloughs.  Delaware employers can learn more about the legal considerations involved in layoffs at our annual Employment Law Seminar on April 29.  (Learn more about the employment-law seminar here and register for the seminar here).

Why Flexible Downsizing Is a Win-Win Initiative

Posted by Molly DiBiancaOn February 18, 2009In: Alternative Work Schedules, Flextime, Reduction in Force (RIF)

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The four-day work week is very popular among public employers these days.  Employers who have implemented a compressed work week program successfully say they've enjoyed benefits such as saved energy costs, decreased absenteeism, and improved employee morale resulting from the change. 

I don't believe that a four-day work week is the solution of all solutions, as some have claimed.  But I do believe that there are certain organizations that, because of their structure and purpose, can be good models for the program.  The ideal candidates, though, are almost always government employers.  A mandatory four-day work week, generally, is not realistic in the private sector. image

But does that general proposition lose its vigor in a bad economy?  Can the four-day work week be implemented in the private sector more effectively because of the downturn?  It turns out that flexible schedules can have important benefits in an economic downtime, just as they can in times of fiscal health.  The trick, though, is to get employers to be aware of the opportunities.  

Fast Company blogger, Cali Yost, has an ongoing series of posts about the benefits of "flexible downsizing" and why employers are better suited to consider this option as opposed to layoffs.  In a recent post, she explains:

There are creative, cost-effective ways to use strategic work+life flexibility to reduce labor costs while remaining connected to valuable talent. These options include reduced schedules, job sharing, sabbaticals, and contract workers.

In a recent interview with Penn professor and author, Dr. Peter Capelli, Yost questioned why more employers aren't taking advantage of the benefits that can be derived from a flexible-downsizing initiative.  Most employers, said Capelli, are too short-sighted, focusing only on short-term cuts instead of the longer term savings to be had.  Capelli asserts that it is cheaper to retain an employee at  5% reduction in pay than to layoff 5% of the workforce because "there are no severance packages; the legal liability and associated costs are much less; and the savings come instantly without the agonizing administrative process of figuring out who has to go…”.

Flexible downsizing is also a valuable option when employers are trying desperately to avoid layoffs--at the cost of the fiscal health of the organization.  These companies are so pained by the thought of laying off personnel that they avoid doing so to the extent that it actually results in more layoffs in the long-term.  Alternatives such as voluntary, across-the-board pay cuts, reduced-hour schedules, and furloughs of even a few weeks can mean the difference between voluntary, and relatively minor, cut-backs now and involuntary and severe cut-backs later. 

SHRM Poll Says Pink Is the New Black This Holiday Season

Posted by William W. BowserOn November 11, 2008In: Reduction in Force (RIF)

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The Society of Human Resources ("SHRM"), reports that that Human Resource professionals are preparing for tough times as the holiday season approaches. The results of a recent workplace poll warns that many HR professionals think they will be playing the role of Scrooge by handing out pink slips. The poll indicates 39 percent of HR professionals think that layoffs are "likely" should economic conditions continue to deteriorate.  LAYOFF NOTICE

The poll also contained the following chilling actions as "likely" in their organizations if things don't improve:

70 percent of HR professionals feel budget cuts across entire organizations will occur
50 percent says bonuses will be cut
45 percent say wages will be frozen
55 percent say hiring freezes will be imposed.

On a lighter note, attorneys William W. Bowser and Scott A. Holt will present The Good, The Bad, and The Ugly: Employment Law Update 2008 at the 8th annual Delaware SHRM conference on November 18 and 19. This year, the program will be held at the Clayton Hall Conference Center at the University of Delaware. This yearly update is a great way to get up-to-speed on the many important developments from the last twelve months--in the courts and legislatures of Delaware and nation wide.

What Is the WARN Act?

Posted by Molly DiBiancaOn September 30, 2008In: Reduction in Force (RIF), WARN Act

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Layoffs are happening. And layoffs have lots of implications-morale implications, business and financial implications, and legal implications.  Any time an employer is considering separating one or more employee for lack of work, a whole host of legal considerations are triggered. For employers with at least 100 full-time employees at a job site, one of the most significant is the Worker Adjustment and Retraining Notification (WARN) Act.  image

In short, the WARN Act requires employers to give advance notice to employees who will be affected by a plant closing.  Generally, 60 days' written notice is required before closing a plant or implementing a mass layoff.  Failure to comply with the Act can result in serious liability, including back pay and benefits for each affected employee for every day that the notice was not provided, for up to 60 days.  This number can quickly add up to millions of dollars.

Who Is Entitled to Notice?

WARN notice must be provided to either affected workers or their representatives (e.g., a labor union); to the State dislocated worker unit; and to the appropriate unit of local government.

Which Employers Are Covered?

Private-sector profit and non-profit employers who have 100 or more employees are covered.   In determining whether the minimum number of employees has been met, only those who have worked at least 6 months in the last 12 months and who work an average of at least 20 hours per week should be included. 

When Must Notice Be Given?

With three exceptions, notice must be timed to reach the required parties at least 60 days before a closing or layoff. When the individual employment separations for a closing or layoff occur on more than one day, the notices are due to the representative(s), State dislocated worker unit and local government at least 60 days before each separation. If the workers are not represented, each worker's notice is due at least 60 days before that worker's separation.

The exceptions to 60-day notice are:

(1) Faltering company. This exception, to be narrowly construed, covers situations where a company has sought new capital or business in order to stay open and where giving notice would ruin the opportunity to get the new capital or business, and applies only to plant closings;

(2) unforeseeable business circumstances. This exception applies to closings and layoffs that are caused by business circumstances that were not reasonably foreseeable at the time notice would otherwise have been required; and

(3) Natural disaster. This applies where a closing or layoff is the direct result of a natural disaster, such as a flood, earthquake, drought or storm.

If an employer provides less than 60 days advance notice of a closing or layoff and relies on one of these three exceptions, the employer bears the burden of proof that the conditions for the exception have been met. The employer also must give as much notice as is practicable. When the notices are given, they must include a brief statement of the reason for reducing the notice period in addition to the items required in notices.

What Must the Notice Include?

Notice must be in writing but no particular form is required.  Notice must be specific. 

What Triggers Notice?

Plant Closing:  A covered employer must give notice if an employment site (or one or more facilities units within an employment site) will be shut down, which will result in an employment loss for 50 or more employees during any 30-day period. 

Mass Layoff: A covered employer must give notice if there is to be a mass layoff that does not result from a plant closing, but will result in an employment loss at the employment site during any 30-day period for 500 or more employees, or for 50-499 employees if they make up at least 33% of the employer's active workforce.

Cumulative Layoff:  Even if the first two events do not occur, WARN Act provides still for a third circumstance where notice is required.  If, during a 30-day period, the number of employment losses for 2 or more groups of workers, each of which is less than the minimum number needed to trigger notice, would reach the minimum threshold if they were combined during any 90-day period.  Job losses within any 90-day period will count together cumulatively.

What Is An Employment Loss?

The term "employment loss" means:

(1) An employment termination, other than a discharge for cause, voluntary departure, or retirement;

(2) a layoff exceeding 6 months; or

(3) a reduction in an employee's hours of work of more than 50% in each month of any 6-month period.

Not included as an employment loss is an employee who refuses a transfer to a different employment site within reasonable commuting distance; an employee who accepts a transfer outside this distance within 30 days after it is offered or within 30 days after the plant closing or mass layoff, whichever is later.  In both cases, the transfer offer must be made before the closing or layoff, there must be no more than a 6-month break in employment, and the new job must not be deemed a constructive discharge.

Are There Any Exceptions?

An employer does not need to give notice if a plant closing is the closing of a temporary facility, or if the closing or mass layoff is the result of the completion of a particular project or undertaking. This exemption applies only if the workers were hired with the understanding that their employment was limited to the duration of the facility, project or undertaking. An employer cannot label an ongoing project "temporary" in order to evade its obligations under WARN.

An employer does not need to provide notice to strikers or to workers who are part of the bargaining unit(s) which are involved in the labor negotiations that led to a lockout when the strike or lockout is equivalent to a plant closing or mass layoff. Non-striking employees who experience an employment loss as a direct or indirect result of a strike and workers who are not part of the bargaining unit(s) which are involved in the labor negotiations that led to a lockout are still entitled to notice.

An employer does not need to give notice when permanently replacing a person who is an "economic striker" as defined under the NLRA.

How Long Is the Notice Period?

With three exceptions, notice must be timed to reach the required parties at least 60 days before a closing or layoff.

The exceptions to 60-day notice are:

(1) Faltering company. This exception, to be narrowly construed, covers situations where a company has sought new capital or business in order to stay open and where giving notice would ruin the opportunity to get the new capital or business, and applies only to plant closings;

(2) unforeseeable business circumstances. This exception applies to closings and layoffs that are caused by business circumstances that were not reasonably foreseeable at the time notice would otherwise have been required; and

(3) Natural disaster. This applies where a closing or layoff is the direct result of a natural disaster, such as a flood, earthquake, drought or storm.

Delaware District Court Awards Summary Judgment to Employer in Age Discrimination Case Brought by EEOC

Posted by Molly DiBiancaOn April 13, 2008In: Age (ADEA), EEOC Suits & Settlements, Reduction in Force (RIF), YCST

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The U.S. District Court in Wilmington, Delaware awarded summary judgment to BE&K Engingeering Company, finding that the EEOC had failed to show that a 54-year-old engineer, who was laid off during a reduction in force, was replaced by someone significantly younger.

EEOC argued that in a reduction-in-force situation, the ADEA prima facie case analysis should be relaxed. The Commission contended that the EEOC only needs to show that BE&K retained several significantly younger engineers while terminating a member of the protected class.

"The analysis is not that simple," Magistrate Judge Mary Pat Thynge wrote, as she rejected EEOC's argument. She cited a district court decision stating that when considering whether an employer gave preferential treatment to younger employees during a RIF, a court must consider "the terminated employee's 'fungibility' or usefulness to the employer in comparison to other employees."

Here, the six younger engineers that EEOC cited as "similarly situated" to the terminated engineer were all employed on long-term projects at the time of the RIF, the court emphasized. The EEOC argued that all engineers were expected to perform the same tasks and easily could be swapped between projects. Significantly, the court rejected the contention, finding that it "fails to address the adverse business costs and impact on future projects when senior engineers are placed on jobs that require only entry-level qualifications."

This case demonstrates the Court's continued respect for the need of businesses to make decisions based on the economic realities of the workplace.

The full decision, EEOC v. BE&K Eng'g Co., can be found at Magistrate Judge Thygne's website.

June 3: Hold Off on Layoffs: Furloughs, Salary Freezes, and Other Labor-Cost Cutters

Posted by Molly DiBiancaOn March 15, 2008In: Reduction in Force (RIF), Seminars, Past

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Layoffs are not the only option for employers who want to cut labor costs.  There are a number of alternatives to layoffs that employers can consider before implementing mandatory reductions in force. I'll be discussing these alternatives in an audio conference on June 3.  image Here are the details:

Learn how furloughs and other layoff alternatives can actually minimize your organization's risk of facing a wage and hour lawsuit and reduce costs. 

  • How mandatory furloughs are structured and how to use them to reduce your organization's legal risks
  • The problems with layoffs: Understanding the real costs of layoffs and why they cost employers money in the long run
  • When -- and how -- salary reductions can stave off a RIF
  • The pros and cons of using hiring freezes and attritions to alter recruitment programs
  • How other layoff alternatives work, such as sabbaticals and shortened workweeks
  • When it makes sense to convert full-time employees to contractors
  • How to avoid discrimination claims arising from the temporary reassignment or transfer of employees
  • Wage and hour challenges associated with telecommuters, including unique expenses, overtime challenges, worktime verification, rest break enforcement, meal periods and "on-call" time
  • How FMLA coverage and eligibility may be affected when implementing layoff alternatives and how to avoid making an inaccurate determination
  • How to deal with internal roadblocks when implementing layoff alternatives, such as a collective bargaining agreements
  • Policy issues that surface when restricting overtime and eliminating bonuses
  • How to use departmental restructurings to avoid layoffs and improve productivity

To register, visit the HR Hero website's page on the audio conference:  Hold Off On Layoffs: Furloughs, Salary Freezes, and Other Labor-Cost Cutters.