Boosting Morale After Layoffs

          In late January I wrote two blog entries concerning the bleak job market.  The day was January 26, 2009, and over 70,000 people lost their jobs at the drop of a hat.  It was aptly named “Bloody Monday.”  Today, the Department of Labor announced a total of 631,000 people filed new claims for jobless benefits in the week ended May 16.   Amazingly, this actually represents a slight decrease of 12,000 from an upwardly revised 643,000 in the previous week.  That is a scary proposition.  

            Needless to say, countless companies are dealing with staff reductions in an effort to keep their doors open.  Those employees who survive the layoff are often apprehensive and nervous about their own job security.  The survivors become consumed by fear, anger and stress. Job performance and career goals go by the wayside.  Conversely, management may believe that the surviving employees will be so grateful that they still have a job that production will actually increase.  So, what is a Company to do?  How can Management bridge this gap of such divergent feelings and emotions?

            A little over a month ago, Elizabeth Garone of the Wall Street Journal published an article setting forth five steps Management can take to help alleviate the feelings referenced above and boost the morale of the surviving employees. 

            (1) Find Alternative Incentives – Obviously cash incentives are in all likelihood no longer an option for those employees meeting or exceeding performance goals.  For instance, one Company created “Winter Fridays,” in which the award was for someone to leave early each Friday.

            (2)  Transparency Is Key – Hold open forum meetings with your staff to discuss why the layoffs occurred and what the Company is doing to get back on track.  Again, employees want to know what is happening with the Company.  This goes a long keeping and/or regaining the trust of your employees.  Management needs to be seen and heard.

            (3)  Recognition Counts – Everyone wants to be patted on the back for a job well done.  It’s human nature.  Recognize people when they succeed.  Again, don’t just make it known to that individual.  Make it known to the entire workforce that so and so is doing a great job and the Company recognizes and appreciates his/her efforts.  This lets the entire workforce know that the Company recognizes and values a job well done.

            (4)  Keep Educating – Obviously, the current economic situation requires that budgets be cut, and continuing education is not immune to those cuts.  Consider alternatives such as internal training, cross-business assignments or projects and on the job training/coaching.  For instance, one Company implemented bi-monthly training sessions over lunch.

            (5)  Promote a Good Work/Life Balance – It stands to reason that after a layoff there are less people to do more work.  Be mindful that the stress the employees are feeling over the layoffs and increased work load can easily create problems at home.  However, understand that the employee also has a “job” at home which may cause him/her to take time out of their day to address personal issues.  Your thoughtfulness/understanding during these trying times can go a long way in gaining the respect and admiration of your employees.  People who respect you will work hard for you.

EFCA LEGISLATION INTRODUCED TODAY

The rumors were true.  Today, the Employee Free Choice Act was introduced in Congress.  The bill was sponsored by Representative George Miller (D-CA), the House Education and Labor Committee Chair, and Senator Tom Harkin (D-Iowa).

As has been well documented, EFCA would radically change federal labor law.  The legislation would allow a union to bypass the election process after collecting authorization cards from a majority of employees.  Consequently, employers would lose the right to request that an election be held.

 

If enacted into law, EFCA would: (1) Eliminate employees’ opportunity to vote in a federally-administered, private ballot election; (2) Require binding arbitration within 120 days after a union is certified through a signed card collection process should the employer and the union be unable to reach an agreement; and (3) Create new fines against employers for an expanded list of unfair labor practices.

 

Click here and here for more details.

EMPLOYEE FREE CHOICE ACT TO BE INTRODUCED TODAY?

Rumors coninue to swirl that that the Employee Free Choice Act Bill will be introduced sometime today.  As of yet, it is still unclear when the House or Senate will vote on this bill. You can go here and here to get the latest news and information regarding to EFCA.  

It would be an understatement to say EFCA has created an enormous amount controversy.  Unions have spent millions upon millions of dollars on this Bill in order to increase its membership, which ultimately leads to increased finances.  Simply put, EFCA makes it easier for unions to organize.  Vice President Biden made some interesting comments in a speech he gave last week to the AFL-CIO Executive Council at the Fontainebleau Hotel in Miami Beach, Florida.  Click here  for the details. 

I continually ask myself one question when thinking about EFCA:  How can an employee have “free choice” if he/she is unable to vote in a secret ballot representation election?  We pride ourselves on being a democratic society.  We even try to instill our democratic values in other countries.  Yet, we are introducing legislation in this country that will ultimately eradicate a fundamental aspect of those values.  Go figure. 

Even Supporters of President Obama have spoken out against the Employee Free Choice Act.  Warren Buffett, a prominent investor and supporter of President Obama’s economic policies, spoke out against the bill this morning on CNBC’s Squawk Box. To view the video and the transcript click here.  (His comments on EFCA begin at the 3:27 mark.)  At one point he states that “card check is a mistake.”  Additionally, EFCA has drawn the indignation of editorial writers, economists, and the American people.

Lastly, a recent study has shown has shown that EFCA may actually lead to job losses and a higher unemployment rate.  For a shortened version of the study click here.  For the entire study click here. 

Stay tuned, uncertain times lie ahead.

Obama Signs Equal Pay Bill

 

President Obama signed his first Bill today.  As expected, he signed into law the The Lilly Ledbetter Fair Pay Act.  The Fair Pay Act extends the period an employee can file a claim of discrimination for making less money than another worker doing the same job.  In regards to today’s signing President Obama stated:  “[T]here are no second class citizens in our workplaces, and that it’s not just unfair and illegal — but bad for business– to pay someone less because of their gender, age, race, ethnicity, religion or disability…”  That’s all well and good.  I don’t think someone should be paid less based solelyupon gender, age, race ethnicity, religion or disability.   However, are we to now ignore an employee’s actual job performance.   It seems like we are traveling down a very slippery slope.  It certainly will be interesting to see how all of this is going to play out in the courts. 

More Bad News

As noted in yesterday’s blog entry, its going to get a whole lot worse before it gets better.  The economic forecast for 2009 is dismal to say the least.  As if we needed any more warning signs a recent labor survey revealed 75 percent of human resource professionals are anticipating more job cuts in the U.S. labor force in the first quarter of 2009.   As witnessed yesterday, the results of this survey have already come to fruition in a huge way.

The Job Market Continues to Crumble

The current economic meltdown continues to wreak havoc on America’s workforce as Caterpillar, GM, Pfizer, Home Depot, and Sprint announced layoffs.  Those abroad are not immune as ING also announced massive cuts today.  Fox News is reporting more than 50,000 jobs were cut today.  CNN has just recently upped the tally to over 70,000 jobs cut and has fittingly tagged today as “Bloody Monday.”  Unfortunately things are going to get worse before they get better. 

Obviously companies must be vigilant in carrying out a planned reduction in force (RIF) in order to minimize the legal risks associated with such a reduction.   This article and this article briefly discuss some of the legal pitfalls associated with RIFs.   However, one thing each of these articles fails to mention is that companies can use releases and waivers to help reduce if not insulate them from employment related claims of employees affected by RIFs.  Releases and waivers can dramatically reduce both individual and class wide claims of discrimination.   In order to be enforceable, the releases must be supported by consideration beyond any benefits which employees are entitled to receive as a matter of policy and/or past practice.  Consideration can take several forms, i.e., severance pay or continued insurance coverage.  

Nonetheless, be sure to note that if employees selected for layoff are age 40 or older, any release under the Age Discrimination in Employment Act (ADEA) must also comply with the Older Workers Benefit Protection Act (OWBPA).  Accordingly, the release must be knowingly and voluntarily executed, it must be written in easily understandable terms, it must specifically refer to the rights  and claims existing under the ADEA, and it cannot extend to rights or claims that may arise after the date the release is executed.  Specifically, each employee age 40 or older must be given at least 45 days to consider the release as well as an additional seven days after execution to revoke the offer.  Secondly, the company must notify the individual, in easily understandable written terms, of the eligibility requirements for being selected to participate in the employment termination program and all time limits that may be applicable to said program.  Finally, the individual must be informed, in easily understandable written terms, of the job titles and ages of all individuals eligible or unselected individuals in the same “decisional units.”   That being said, an employee cannot wave his or her right to file a discrimination charge with the EEOC, or to participate in an EEOC investigation. 

An Employer who lays of workers in a RIF for business reasons can nevertheless become subject to age discrimination claims based on disparate impact by those employees who are age 40 or over.  The attached article discusses the selective criteria Employers use in deciding which employees to let go and the use of statistical analysis to avoid disparate impact based on age.   This is especially important considering a little over three and one half years ago the U.S. Supreme Court ruled that age discrimination claims under the ADEA can be based on the theory of disparate impact when facially neutral factors used in the selection process resulted in termination of a disproportionately high number of older workers.  Smith v. City of Jackson, 544 U.S. 228 (2005).   Notably, the Employer bears the burden of proving its selection decisions in a group termination program are based on reasonable factors other than age.  Meacham v. Knolls Atomic Power Laboratory.  (We all know how hard it is to prove a negative.)

The example cited at the end of this article illustrates the ease with which an Employer can unintentionally adversely impact a protected class of employees by using seniority as a selection criterion.

Lastly, Jon Hyman of the Ohio Employer’s Law Blog aptly notes that reverse age discrimination should not be a concern in layoffs.

Sometime later this week I will discuss how layoffs negatively affect those workers who were lucky enough to retain their jobs.

Fair Pay and Paycheck Fairness Acts Passed the House

Although both of these Acts sound like they cover the same purpose – make sure that everyone is paid fairly, they actually serve two distinct purposes.  Nonetheless, both coasted through the House of Representatives last week without even a debate.  The Paycheck Fairness Act passed mostly along party lines by a vote of 256-163 and the Fair Pay Act passed 247 -171.  The Senate will vote on this bill within the next several weeks, although a date certain has not yet been determined.

According to the US Chamber of Commerce, who opposed both bills, The Fair Pay Act conflicts with current laws that govern the statute of limitations regarding discriminatory actions by employers against employees.

According to House Republican Leader John Boehner:  Today’s effort by the Democratic Majority is not about workplace discrimination; it’s the first step in an effort to begin g the special-interest allies who helped give the Democratic Party control of Washington.  These bills do not reflect the priorities of the American people; they reflect the narrow interests of te powerful trial lawyer industry that last year used its ill-gotten war chest to help the current majority tighten its grip on power.

Following that thought, the Wall Street Journal editorial board agrees that the bills amount to an earmark for trial lawyers.  The editorial board weighed in on the Fair Pay Act statute of limitations issue by publishing:

[The Supreme Court's] ruling put to rest Ms. Letbetter’screative theory that decisions made decades ago by a former boss affected her pay all the way to retirement, so that each paycheck was a new discriminatory act and thus fell within the statute of limitations.  Yet, that is exactly the theory Congress would now revive with the Ledbetter bill.  There would no longer be time limits on such discrimination claims.  They could be brought long after evidence had disappeared or witnesses had died – as was the case with Ms. Ledbetter’s former boss.  For the tort bar, this is pure golf.  it would create a new legal business in digging up ancient workplace grievances.

The Paycheck Fairness Act quietly scooted along until it was passed because it doesn’t create as much of an administrative nightmare as the Fair Pay Act.  Nonetheless, it bars employers from penalizing workers who share salary information (which is already prohibited by the National Labor Relations Act), and requires some employers to disclose to the EEOC their wage rates for general job classifications.  It also prohibits companies from lowering any employee’s salary in order to pay others fairly.  This is so ill-defined that there will be tremendous amounts of litigation in the next few years as the courts wrestle with what exactly that means.

More analysis and coverage of these Act will occur in the coming weeks as the Senate looks at these bills and once they begin being followed.  In the meantime, just remember that they are out there and once passed by the Senate and signed by Obama, companies will be forced to change the way they keep records, at a minimum.

As Expected: Strike 1 for Employers

Both the Ledbetter Fair Pay Act  and the Paycheck Fairness Act passed yesterday.  I will anal yze their passing in the near future, but it suffices to say that these are two warm ups for EFCA and more severe union-friendly legislation to come.

Paycheck Fairness Act

The Paycheck Fairness Act was introduced in March 2007 by Sen. Hilary Clinton and Rep. Rosa DeLauro to amend the Fair Labor Standards Act to offer stronger protection for employees against compensation discrimination on the basis of sex.  Rep. LeDauro, D-Conn. first introduced this legislation 12 years ago, but now is the time it will become law. 

 

Currently, employers can avoid liability if they prove that the alleged discrimination comparison was a result of any factor other than sex.  The Paycheck Fairness Act limits this defense to situations where the factors other than sex are job-related or serve a legitimate business interest. 

 

The act also prohibits employers from retaliating against employee who share salary information, but this is prohibited, anyway by the National Labor Relations Act.

 

The Paycheck Fairness Act also increases civil penalties against employers who violate it, makes it easier to bring class actions, and authorizes the Secretary of Labor to seek additional compensatory or punitive damages.  This authorization is similar to the Working Families Flexibility Act (aka “union of one law”) permitting the Labor Secretary to impose additional penalties for not negotiating with a single employee over the terms and conditions of that employee’s job.

 

Like the Ledbetter Fair Pay Act, the Paycheck Fairness Act was introduced to Congress last year.  The Act, again like the Fair Pay Act, passed in the House of Representatives but did not pass the Senate.  With Democrats padding their seats in Congress, both Acts should sail through Congress this time and reach Obama’s desk soon after he enters the White House, and of course, Obama has embraced both Acts.

 

According to the AP, House Speaker Nancy Pelosi said she was “very excited” about leading off the new Congress with labor rights issues.  And “the early foray into labor rights issues is a prelude to what could be the most controversial bill that Congress tackles in the first year of the Obama administration – legislation to take away the right of employers to demand secret-ballot elections by workers before unions could be recognized. (10)

Voting on the Ledbetter Fair Pay Act

Voting on the Ledbetter Fair Pay Act was set to occur on Wednesday, but is now going to happen on Friday of this week.  Most followers of this legislation view it, along with the Paycheck Fairness Act (which will also be voted on on Friday), to be warm-up votes to the Employee Free Choice Act.

 

To recap, Lilly Ledbetter worked at an Alabama Goodyear tire plant for nearly 20 years before learning that she was not paid as much as men performing her job duties and won $3.8 million for the apparent discriminatory pay.  But, the United States Supreme Court overruled the lower court and held that as the law is currently written, minorities have 180 days from the time their employer began paying them less than their counterparts in order to sue.  Since Ms. Ledbetter waited 20 years to sue, she was precluded from recovering money for the alleged disparate pay practices.

 

Tomorrow the House of Representatives is scheduled to vote on whether to pass the Lilly Ledbetter Fair Pay Act (and the Paycheck Fairness Act which I will write about over the weekend).  The bill was voted on last year, too, and went the way EFCA votes went: passed in the House of Representatives, but died in the Senate.  That was last year.  Now there are enough Democrats in Senate to prevent the Republicans from blocking this bill as well as the other pro-labor bills like EFCA, the RESPECT Act, the Patriot Employer Act, and the Flexible Working Families Act.

 

Both the Fair Pay Act (and the Paycheck Fairness Act) are touted as gender equity laws, but that is a misnomer – just like how there is no choice in the Employee Free Choice Act.  Liberals use an often quoted but rarely defined statistic that women make 77 cents for every dollar a man makes.  As stated by Allison Kasic:

 

This statistic compares the wages of the median full-time working man and the median full-time working woman.  It tells us nothing about the existence or non-existence of wage discrimination.  The wage gap ignores a myriad of other relevant factors including education level, years in the workforce, and type of occupation.  Once these other factors are taken into account, the wage gap shrinks.

The fall out of this legislation is enormous.  Ms. Kasic correctly states that the Fair Pay Act would allow a former employee – from 40 years ago – bring a lawsuit against a company long after that employee has moved on from the company.  Likewise, Drew Greenblatt the owner of Marlin Steel Wire Products, a small business that makes wire baskets, is scared that his employment insurance premiums will increase as a result of the myriad of unknown lawsuits that could be asserted decades later.  Without a doubt, the passage of this will make the cost of doing business increase exponentially.

 

Of course I will update you on both the Ledbetter Fair Pay Act and the Paycheck Fairness Act after Congress votes.