1. A large company is planning to downsize.A consultant suggests the following:
It makes sense to focus on one of your unionized plants.We suggest that you reduce the 300 employees at that plant to 100. Some of the components that you produce at that plant can be made at your non-union South Carolina plant.
Since you will be terminating 200 employees, I suggest that you terminate 50 employees per week. This way, you won’t have to worry about any legal requirements for providing notice.
If you want to be safe, you can send a letter to employees the week before you begin the first wave of terminations telling them that the long-term prospects for the plant are not good.
Let the supervisors use their best judgment about who should be retained.They know best.
Consider offering an early retirement plan to generate some voluntary turnover, but don’t get people’s hopes up by announcing it before all the details are in place.
If you offer an early retirement plan, require that all employees who accept it waive their ADEA rights.
Taking early retirement is an important decision, so give employees two weeks to think over the offer:
What are the legal problems with the consultant’s advice? What would be better advice?
2. What are some feasible alternatives to downsizing? If downsizing must occur, what criteria should be used to select those individuals who be be downsized?
3. Does the employment at will with exception standard provide sufficient protection for employees? Would it be better if all employers were required to meet a just cause/due process standard for termination? Why or why not?
