Downsizing
Study alternatives, liability
when cutting staff size 		Powerful Business, Spring 2002, A Quarterly Publication of Tampa Electric  


     Businesses that are considering downsizing to rescue profits should review all available methods, said Janet Goldberg McEnery, a labor and employment attorney at Macfarlane Ferguson & McMullen in Tampa.
     Small businesses need to know how applicable laws come into play, she noted.  Those include the Age Discrimination in Employment Act (ADEA); ADA (Americans with Disabilities Act); FCRA (Florida Civil Rights Act) and the Family and Medical Leave Act (FMLA).
     There are some alternatives to layoffs, but these alternatives are not without risk, McEnery said.  They include:

  • Salary freezes or adjustments;
  • Hiring freezes;
  • Reducing work hours and pay;
  • Attrition;
  • Offer of early retirement or voluntary reduction in force;
  • Eliminating 401K matches;
  • Offers of sabbaticals;
  • Unpaid leave

Janet Goldberg McEnery, labor attorney at Macfarlane Ferguson & McMullen

      In avoiding liability for layoffs, she recommended having a plan that explains the business reasons for both a layoff and why a particular person was selected.  Small businesses also need to document reasons to make sure they are not targeting people in protected classifications “or that the criteria chosen does not adversely affect protected categories”.
        She also suggested that businesses review current benefit plans and consider severance benefits and a written release.
      “Handle laid-off workers with dignity, “ McEnery said.  “Be upfront and fair, and tell them why this is happening.”               
     She also said it was important to remember the morale of remaining employees.
     “Don’t use layoff as a ruse for ridding the company of the problem employees whose work issues are not documented,” she said.
      The Center for Ethics sponsors discussion forums each year.  For further information, call 813-258-7415 or e-mail Wendy Plant at the Center at wplant@ut.edu.

-- Michelle Adler
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