Breaking News: President Bush Signs ADA Amendments Act
Yesterday, President Bush signed the ADA Amendments Act of 2008. For more details on the new law, click here. The changes take effect Jan. 1, 2009. Get ready to comply–attend our audio conference on the new law on Oct. 8.
Layoffs: Big Brother is watching you
This should come as no surprise, but people don’t like getting fired. When it happens, they look for someone else to blame. And that someone else is you. “You fired me because I’m [fill in protected class here].”
And that’s not the end of it. Not only can your (former) employees sue you, but the Equal Employment Opportunity Commission (EEOC) can, too. And the EEOC has said that it is going to be looking closely at layoffs during these troubled economic times to see if the potential for a class action exists.
So how should you protect yourself? There are three key elements:
The economy is in a slump, and it’s not clear when economic indicators will start to look up. Most employers are feeling the pinch and looking for ways to cut costs to stay afloat. For some, layoffs may be–or already are–on the horizon. Making your way through a reduction in force (RIF) can be one of the more difficult tasks you face as an employer. How do you decide whether to cut jobs? What’s the best way to select who must go? How can you avoid age bias claims? Find out here.
1. Methodology
The most important factor is to select a sensible system for a layoff and then be consistent in applying it. The problem is that there are always some employees who don’t fit your system. For example, you set your layoff selection standards and then discover that if you follow them, you’ll have to fire your best salesperson.
As soon as you make an exception, you’re going to hear, “You let him stay but you fired me–it must be because I’m X.” You’ll try to justify your actions, but you’ve blown your credibility because you didn’t follow the system.
That’s why it’s important to think things through and do some analysis after making your tentative selections to see if there is any adverse impact on members of any protected classes. If there is, and especially if there is any doubt about the method you used for the backup documentation, you may want to rethink.
Face it, if you can see adverse selection, so can the EEOC, and so can your employees’ attorneys. Many experts recommend that your pre-layoff analysis be carried out with your attorney so that it is protected under attorney-client privilege laws.
2. Seniority
Seniority is often considered the safest way to go. There’s little subjectivity involved, and employees and courts understand the system. It seems fair.
However, using seniority often won’t leave you with the critical staffing needed to move ahead. In that situation, you need other criteria. Performance is often a criterion, but for that to stand up in court, you’ll need a good performance appraisal system that is consistently managed.
Check out our exclusive Special Report, Navigating a Reduction in Force Without Getting Sued. It includes strategy tips, legal minefields to watch out for, and a detailed Reductions in Force checklist. Download it now here.
3. Performance Appraisals
Most organizations have performance appraisal systems, but most of them aren’t very convincing in court:
- Virtually everyone gets a rating of “satisfactory” or better. (You know that “satisfactory” means “poor,” but that’s a hard sell in court.)
- Managers and supervisors often have had no performance appraisal training
- Typically, the ratings are highly subjective.
- Almost everyone gets a raise and a bonus.
The bottom line is that in many cases, appraisal systems aren’t very consistent or reliable, and that means trouble if you are sued. The best advice is to review your appraisal system now, and get it in shape before you have to demonstrate its fairness in court.
Consider the following:
- Check out the system itself. Do you set clear goals, and do appraisals measure and reward against the goals?
- Train supervisors and managers. To obtain consistency, give all appraisers guidelines and practice.
- Establish a review system so HR can see if there are aberrations
Performance appraisals are a key tool for keeping employers out of legal hot water. Build a solid defense against wrongful termination lawsuits with our exlusive Employer Guide, Performance Appraisals: How to Bolster Employee Performance and Decrease Your Risk of Lawsuits. Download now »