None of us can be certain of what to expect in these turbulent economic times but we can be certain most of us will see increased workplace challenges. HR professionals and the labor law community are being advised to anticipate significant increases in work related complaints and lawsuits as the fallout from the current economic downturn continues.
In this volatile business climate employees are anxious to alleviate their economic and emotional pain and an employer may become the focus of employee frustration and anger. The result may be a financially and emotionally draining lawsuit at a time when every business resource is already stretched too thin. The U.S. Equal Employment Opportunity Commission (EEOC) reported 2007 as having the highest volume of incoming private sector discrimination charge filings since 2002 and the largest annual increase since the early 1990’s. We can only imagine what the final tally for 2008 and beyond will be given the rapid deterioration in overall economic conditions. Employers who believe this won’t happen to them can be seriously wrong; former employees who find their unemployment benefits ending, savings gone and no other job prospects in sight have significant motivation to look for a lawsuit.
Lawsuits can run the gamut from age discrimination to harassment. In a volatile economic climate employers must be extra vigilant to ensure legally compliant employment practices are in place and enforced. Managers and supervisors must be educated on legal employment practices and held accountable for maintaining sound HR practices.
Workforce reductions are a particularly difficult issue and employers often make serious legal mistakes which leave them vulnerable to wrongful termination suits. Some simple advance planning and careful management of the termination process can make all the difference in terms of legal liability.
If a workforce reduction becomes necessary the following steps are critically important:
- Determine the criteria to be used to establish who will be laid off and be certain it is consistently applied. Carefully evaluate whether your criteria have a disparate impact on protected categories before you implement your plan. If there is any question call on a professional to do an objective evaluation.
- If you are basing reductions on merit be certain your selection process can withstand scrutiny. Nothing spells lawsuit faster than laying off someone for poor performance when their performance reviews have been positive. This is also not a time to try to rewrite history so be sure if you have a performance appraisal process in place it gives an accurate picture of an employee’s performance.
- Document the workforce reduction process and educate your managers on the process and their responsibilities.
- Be honest with employees during the process and avoid making promises or sugar coating the truth.
- Always treat laid off employees with dignity.
- If at all possible have more than one person present during the termination and document it.
Maintaining solid HR practices during difficult economic times is the key to preventing difficult and costly legal challenges.