With an economic downturn, downsizing often follows. Unfortunately, employers who trim their workforces may be vulnerable to wrongful termination litigation if they don’t adopt fair employee practices and document termination procedures, says Aleicia Latimer, associate general counsel and human-resources services manager at AlphaStaffGroup of Fort Lauderdale. Latimer spoke recently to Smart Answers columnist Karen E. Klein about how planning and procedure can help small-business owners get through tough times. Edited excerpts of their conversation follow:
No business owner wants to lay off employees. But if the process becomes inevitable, where does the small-business owner start?
Prior to doing any type of layoff or reduction in force, you want to establish a business reason and document what are you looking to accomplish with the layoff. Document what’s put your company in this situation. Is it the economy? Is it your industry? Your regional location?
How formal do you make this document?
I would say you should be able to articulate your business reason for having to take this action in pretty formal fashion. The reason for this is, even if you carry out your layoff perfectly, there may be a chance that someone will say their job shouldn’t have been eliminated and sue. If that happens, you want to have documentation of your reasoning, your process, and why the laid-off employees were chosen.
So you want to avoid any type of discriminatory issue, or even the appearance of one, in taking this action?
Yes. Make sure that before you launch into layoffs you’ve explored alternatives and documented them also. For instance, you might try limiting overtime, shortening work weeks, and reducing expenses. Ask people who want to retire to step forward, and provide them with a severance package. Your process should include proof that you tried other remedies before jumping right to layoffs.
How do you decide who…