Potential Legal Issues: A Case Study
There may be times when a company experiences a financial crisis and considers the need to downsize the employee base. However, there are a number of issues for management to consider in the selection and manner in which terminations are performed. In order to avoid litigation based on discrimination wrongful termination, and violations against laws within the Department of Labor, a company follows strict procedures. Attention to incentives for early retirement, severance packages, signing of waivers, and documentation that will hold up in court should a lawsuit arise can save a company significant time and money.
Following are examples of potential violations in the provided case study for a company in the process of downsizing based on the loss of revenue from a branch of operation.
- Non-solicitation agreement violation, as in the case of Paul Clark in the case study, is a formal restriction against a former employee soliciting customers of the previous employer (BSF) after leaving that position (Murray 2014). Paul Clark secured a present customer from BSF for his new employer.
- Anti-discrimination lawsuits cite Title VII of the Civil Rights Act of 1964, which states employers cannot give specified treatment to an employee or group of employees based on a specific characteristic. In the case study, the group of students hired from the HRER program received more recognition and higher employment reviews than warranted, based on the origin of their training.
- Other anti-discrimination lawsuits. When the CEO began mass layoffs, the human relations department needed to evaluate the statistics of the employees targeted for dismissal for an advertent or inadvertent tendency toward too many minority groups members, women, or other groups that could claim discrimination and file a lawsuit stating such after the process had been completed.
- Illegal Layoffs are addresses by the federal Worker Adjustment and Retraining Notification Act (WARN). Employees involved in a mass layoff receive no less than sixty days advance warning. Of the employees are members of a union, the union is notified and given the responsibility of contacting the employees.
- Unfair labor practice (ULP) has basis for litigation for discrimination occurs based on an employee’s union affiliation. The case study stated non-union employees were required to sign an agreement to continue employment and discrimination may be alleged.
- Unfair labor practice addressed by the National Labor Relations Act states in the event of downsizing, negotiation with union representative may be required (Walsh 681). Proof that the move was needed for the business to continue would be required and in not directed specifically again union members.
- Age discrimination occurs when employees over the age of 40 are not given the mandatory forty-five days to take the opportunity to consult an attorney and to consider the activities offered by their employer in the way of waivers, acknowledgements, and other legal paperwork.
- Inadequate notice of layoff in violation of the Worker Adjustment and Retraining Notification (WARN) Act occurs when an employer warns employees of a layoff, then subsequently closes the facility permanently without a sixty-day notice (Walsh 685). According to a judgment in 2001 (Graphic Communications 1), notice of a business closing must precede the closing by sixty days, even though notice has already been given of layoffs.
- Inadequate notice of closing. WARN mandates a ninety-day closing notice prior to termination of employees in New York State (“New York State Labor Law, Overtime” 2014). The case study was unclear to the location of BSF.
- No option for relocation. The WARN act promotes employers to offer employment to employees involved in downsizing the option of continued employment in another area of the company. If this option is not offered, other incentive such as sixty days of continued pay and benefits may be acceptable.
- Lack of progressive disciplinary documentation. When the CEO ordered termination of the non-union employees with the lowest scores on the previous year’s performance evaluation, the Equal Employment Opportunity Commission would debate whether wrongful termination existed based on progressive documentation or simply the lowest scores.
- Wrongful Discharge. In directing termination of employees based only on whether they were full or part-time, the CEO opened the door for this lawsuit basis. Documentation is required showing lack of skills, progressive counseling on poor work performance, or other determination factors for selective terminations.
- Inadequate notice of termination to employees. In the event Penn State switched to artificial turf, the division producing the natural turf would be closed and all the employees terminated. The CEO opted to keep this information private. Should the mass layoffs become necessary, it may be argued the workforce was not given sufficient notice. This would depend on the amount of time given for notice and the offering of severance packages.
- Sex Discrimination. In the case study, “you” describe the CEO of BSF as a woman with “a youthful appearance and more energy than a new puppy”. This may be grounds for a sex discrimination suit. You would not have described a man in the way, nor an older woman.
- Inadequate notice of termination to the United States Department of Labor. Although the company knows there is a possibility the branch will close, it is withholding the information not only from the employees, but from the Department of Labor, making them open to two suits concerning the law.
Works Cited
Graphic Communications International Union. Local 31-N v. Quebecor Printing Corp.,252 F.3d
296 (4In Cir. 2001).
“New York State Labor Law, Overtime”. Lawyers and Settlements.com. 2014. Web. 1 Dec 2014.
Murray, Jean. “Non-Solicitation Agreement”. About Money .2007. Web. 25 Nov 2014.
Walsh, David. (2012). Employment Law for Human Resource Practice, David J. Walsh, 4th
edition, 2012. ISBN 9781111972196
