Case 6.4

MedEquip Inc., a medical services company with 500 employees, has experienced an extensive business downturn. They are planning to implement a layoff of about 20% of the hourly and managerial workforces. Because of time demands and financial pressure, they will implement the layoff in 30 days.

As an HR consultant brought in to help with the layoff, they turn to you for answers. This experience will be traumatic, since MedEquip has “verbally” committed to lifetime employment. They are planning to use work performance as the layoff criterion. Only about 3 areas of the business will be affected — MIS, facilities, and accounting. Management is concerned about security in these areas, and there are minimal backup files available.

While it is a large company, MedEquip has built a family atmosphere and everyone feels very close to everyone else. Corporate headquarters is in a fairly small community of about 10,000 people. They have hired a PR specialist to handle the press releases and public communications about the layoff.

When the layoffs begin, Olivia and Quincy, two middle managers who will not be laid off, will hold group meetings with the sections involved. They then plan to have professional associates inform others about the layoff. They want you to conduct large group briefings orally. They do not want to give employees anything in print so they won’t be drawn into litigation.

97. Refer to Case 6.4. Given the time frame and number of employees MedEquip will layoff, which of the following is true?

a) They are not in violation of WARN because they are laying off less than 50% of the workforce.

b) They can offer laid-off employees 60 days of income instead of 60 days warning.

c) They are not subject to WARN because they are too small of an employer.

d) They are not subject to WARN because they aren’t closing the business.

e) They are in violation of WARN and must extend the layoff deadline by 30 days.

98. Refer to Case 6.4. What is your evaluation of their layoff criterion?

a) It is not legal.

b) It will disproportionately impact women and minorities.

c) It is the most common criterion used. They will have no trouble.

d) It is more subject to legal challenge than other criteria, but it will help them retain their top performers.

e) It will result in the “last in” being the “first out.”

99. Refer to Case 6.4. Given the primary areas affected by the layoff, you should recommend:

a) escorting affected employees off-site as soon as they are notified.

b) not worrying about security.

c) holding the large group termination session at the end of the week so employees can blow off steam over the weekend.

d) providing employees an opportunity to “let off steam” in the termination meeting.

e) having HR conduct the termination sessions one-on-one with the employees.

100. Refer to Case 6.4. The CEO asks your opinion on Olivia and Quincy’s plan for the termination process. You should tell her that:

a) it is a solid and humane way to share the bad news.

b) not providing written documents is good, an oral briefing is sufficient.

c) having an outsider brief them in a large group is the best way to control any hostile feelings.

d) they should also coordinate media relations.

e) it is a very poor strategy and violates almost every rule a manager should follow in communicating a layoff.

Case 6.5

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