Workplace transparency helps ease pain of employee layoffs

By Nicole Lucht

Fri, Nov 27, 2009 (3 a.m.)

Talk to us. Please.

That’s the sentiment expressed by workers whose employers are mum about workplace changes.

Perhaps a company thinks it can stay quiet about consolidation or layoffs, employing a strategy to blindside its workers, but typically employees can sense when change is afoot. And that can lead to rampant speculation, rumors and lost productivity.

Major companies, such as airlines, manufacturers and software giants, announce company consolidation plans and layoffs before they happen, giving employees time to prepare financially and emotionally.

One recent case is AOL, which announced it is cutting its workforce by 2,500 people, first through voluntary buyouts, and then if enough workers don’t step forward, forced layoffs.

Morale is not good for Las Vegas city government workers after it said it would lay off 19 workers in January, Mayor Oscar Goodman told reporters during a recent news conference, the Las Vegas Sun, a sister publication of In Business Las Vegas, reported.

Because Nevada is an at-will state, employers and employees can end the working relationship at any time without cause, said Miranda Du, an employment law attorney who heads McDonald Carano Wilson’s employment and labor-law group.

The most straightforward way to select workers for layoff is last-in, first-out, preserving the more senior employees, she said. However, that doesn’t always make sense from a business perspective as employers look to cut expenses, including higher wage earners, she said.

And the newer employees may actually be the best performers, she added.

Regardless of a company’s layoff methodology, those making the cuts need to have documentation to support their decisions in case a jilted employee sues for discrimination.

The first thing employees need to ask themselves after they have been laid off is why they think they have been cut, said Richard “Tick” Segerblom, an attorney who represents employees.

Discrimination could come in the form of age, gender, ethnicity, disability, health status (for example, diabetic or pregnant) or an on-the-job injury.

“That’s really the crux of it,” he said. But if employers have done their homework, their layoff selections will be ironclad, and employees have little room to fight any perceived discrimination.

“The basic rule of thumb is you don’t lay off the people you want to keep,” Segerblom said.

The next decision an employer needs to make is how to best communicate the decision to employees, while considering the remaining workers’ morale.

Du suggested offering workers being laid off a severance, and at the same time have them sign a form releasing the company from liability claims. One caveat: Workers age 40 and up have 21 days to sign the form and seven days after signing it to renege on it. This is meant to protect these older workers from age discrimination, Du said.

Segerblom said if he could give businesses a word of advice, it’s this: “Try to do it as fast as possible. It’s increasingly demoralizing when word is out (layoffs) are going to happen.”

Laying off workers is a difficult process for employers as well as for employees, Du said.

“The employers agonize over the process because it’s a tough thing to do,” she said. “(But) they can communicate better so it doesn’t come as a shock or (is perceived as) unfair ... Both sides need to be sensitive to that.”

Laid-off employees should also try to keep in touch with colleagues still at the company to keep tabs on if the employer is calling people back, and if so, if they are being called back out of order if there was a seniority system.

But Segerblom cautions employees who think they have been discriminated against from seeking legal action for at least six months.

“The worst thing you can do is be looking for a job and suing your former employer,” he said.

It’s often best to just accept the severance check and sign the liability release, he said.

Although employers can require employees under age 40 to sign the release immediately lest they lose their severance package, most businesses won’t do that, he said.

“Call their bluff,” he said. “If they’re that eager for you to sign it, there might be something wrong.”