Executives, managers and other leaders at successful organizations sometimes have to make difficult choices. For example, sometimes conducting a large-scale staff reduction or downsizing effort might be necessary for the long-term solvency of the company.
Any scenario in which companies terminate multiple workers at once can potentially lead to legal challenges and litigation. The workers who lose their jobs may take issue with the company’s decisions and may try to fight back by whatever means they can. Those preparing for downsizing often need to be very fastidious to help mitigate the likelihood of workers laid off or terminated trying to sue the company afterwards.
How can businesses reduce the likelihood of worker litigation in a staff reduction scenario?
Conduct a careful internal review
One of the best ways to ensure that the company makes appropriate decisions about worker retention before layoffs is to evaluate the performance of departments and individual workers. There should be objective standards used for this evaluation process.
Looking at the efficiency of individual departments can help organizations determine which workers may not pull their weight and which departments may have redundant positions. The information gathered during that process can also help serve as internal evidence justifying the decisions the organization makes about who keeps their job and who gets let go.
Delay announcements until after a secondary review
After establishing standards for making decisions and targeting specific departments for reductions, the company may have a list of positions it intends to eliminate or workers it intends to terminate. Before announcing those decisions, having a different party review the proposed list of terminations can be an important step.
Someone who was not involved in the initial decision-making process can review the list of people who may lose their job. That uninvolved person may be able to identify trends that could lead to litigation. For example, maybe there is a disproportionate number of workers over the age of 40 included in the list. Maybe all the workers involved in a whistleblower complaint are about to lose their jobs.
If workers can credibly claim that the company retaliated or discriminated when making those decisions, the business may be at risk of litigation. Negotiating severance agreements with the workers who stand to lose their jobs can also be an important part of protecting the company from the possibility of an employee lawsuit.
Employment lawsuits can drain company resources and damage a business’s reputation as an employer. Approaching downsizing, terminations and layoffs with the right perspective can go a long way toward mitigating company exposure.
