Companies must also think the legal ramifications of reducing staff. Federal, state and in some instances local laws will influence a company’s right to downsize its work force. For instance, firms with collective-bargaining agreements may very well have some obligation to bargain with the union regarding the impact of the layoff, at least with respect to bargaining unit employees. Plant closing laws also necessitate advance planning. Before counting up the cost savings, businesses and nonprofit organizations need to think cautiously about the legal risks of reductions-in-force.
Federal and state laws forbid employers from considering aspects such as the employee’s ethnic group, sex, age, disability, or protected conduct in determining which workers to terminate in a discharge. Although businesses need to be aware of all protected groups in planning a reduction, Age discrimination claims are often the most frequent lawsuit arising out of reduction. (Henry and Jennings 2004)
State and federal laws prohibit employers from retaliating against employees who have occupied in a protected activity, such as filing a discrimination claim, requesting reasonable accommodation, making allegations, or engaging in union organizing action.
To minimize the risk of discrimination charges. Even employers who had no intent of discriminating have been required to defend themselves. It is important to keep the following things in mind:
- If job performance is the criterion, limit the subjectivity of the appraisal process, and make sure that performance measures evidently relate to the position.
- Demonstrate respect for affected workers and survivors.
- If the reduction is accomplished through voluntary severance packages, be sure the employees enter into the agreement liberally. (Kuhn and Stout, 2004)