An Overview of Current Law and Trends

Getting Fired: What to Do If You're Fired, Downsized, Laid Off, Restructured, Discharged, Terminated, or Forced to Resign
by Steven Mitchell

Radio and television interviewers frequently ask me why I say that a job is like a romance. My answer is that companies woo applicants with promises of security, fulfillment, and riches. Then, when the honeymoon is over, even highly qualified people often find themselves being treated unfairly. Many don't receive promised benefits, such as year-end bonuses, commissions, and overtime. Others are fired without cause or notice through no fault of their own.

Being fired is never good news, and the fact is that hundreds of large companies throughout the United States continue to announce major layoffs. In a layoff (also called a downsizing or a restructuring), many members of a company, a division, or a department are terminated en masse due to the company's perceived financial constraints, budget considerations, or merger with another company. These layoffs differ from one-on-one firings, where only one or several individuals are let go.

In the past, younger workers with less seniority were generally the first to be laid off in a corporate downsizing to reduce payroll costs. But because younger workers were typically at the low end of the wage scale, companies learned they would have to make substantial cuts to achieve meaningful savings. They realized it was more effective to offer early retirement and severance packages to older workers at the top of the wage scale as the way to reduce costs and stay competitive. This enabled them to fire fewer workers but achieve the same result.

Although this tactic appears to be discriminatory because it targets older workers, some employers found that it was legal when disguised as an offer of an early retirement package. Federal and state discrimination laws often approve early retirement programs because they are perceived as an offer of an employee benefit, which employees have the choice of voluntarily accepting or not.

Companies learned how to survive charges of discrimination provided they based reduction-in-force decisions on legitimate business reasons and used objective criteria, such as demonstrable economic necessity, performance reviews, and productivity evaluations, when selecting the employees to be discharged. This caused the burden to fall on employment lawyers to try to prove that in many major layoffs the choice of individuals to be fired was based on gender, race, national origin, religion, or other categories protected under the Civil Rights Act of 1991, the Age Discrimination in Employment Act, or state human rights laws. This is often difficult to prove. The result is that the majority of terminated individuals cannot make such a claim and prove that illegal discrimination entered into the selection process.

Many individuals who are offered early retirement packages want and need to continue working and don't consider the package a gift. They face a dilemma: If they refuse the offer, they feel that the next step, in six months or a year, will be a notice that their job is being eliminated with no offer of enhanced benefits. Wouldn't it be better to accept the package now?

Companies also recognized that if they needed to hire more workers after business conditions improved, they could do so at less cost by hiring “contingency” workers. These are part-time, temporary, freelance, and contract workers who agree to accept less pay and job security and a lack of health insurance and other benefits because, in today's job market, many are unable to find permanent full-time work. Commentators suggest that this development has significantly altered the landscape of the U.S. working world.

The net result is a business climate that can be very cruel. Anyone can get the ax these days. According to a report by the outplacement firm Challenger Gray & Christmas, layoffs surged 74 percent in the first three months of 1996, compared with the same period the year before, claiming nearly 170,000 jobs.

Furthermore, what is often not considered is the effect that layoffs, firings, and cutbacks have on the people that remain at a company. When workers feel the process was handled tactlessly or cruelly, they are certain to wonder if they will be the next asked to leave. This climate of uncertainty can demoralize entire departments.

People will always be fired for the usual reasons, such as poor performance, habitual lateness, excessive absences, insubordination, or disobeying work rules, regulations, and policies. What has changed the rules of the game, however, is being fired because of corporate greed, to satisfy a manager's desire to cut costs, or merely as a result of general business conditions.

© 1998 by Steven Mitchell Sack

About the Author

Steven Mitchell Sack is the author of Getting Fired: What to Do if You're Fired, Downsized, Laid Off, Restructured, Discharged, Terminated, or Forced to Resign.