A business owner recently explained that her company was planning to reduce the staffing budget. She wanted to allot more funds to launch a new product in the marketplace. Her idea was to put five hourly, non-exempt, administrative staff in a room and have them figure out, on their own, how to handle the reduction. The options included an overall reduction of hours for each, to one or more employees losing jobs. The group was expected to work it out among themselves and the business owner would agree to whatever was decided.
My response to the client: Your business is not a democracy so don’t entrust key legal decisions to staff. Employees don’t necessarily have their employer’s best interests in mind and may not understand the legal ramifications and liabilities of their democratic decision.
Democracies are for governments. Business owners must retain power and authority to make organizational decisions, despite the sometimes painful consequences of those decisions on staff. That’s not to say that employees can’t or shouldn’t have input into certain matters (e.g., where to hold the office holiday party this year), but ultimately, key business decisions like layoffs should not be delegated.
Owning a business is wrought with challenges, but leaders don’t shy away from making tough decisions. Staffing decisions should always be well-reasoned and legally justified. For example, when downsizing a department, you should consider existing contracts, written policies, past practices, seniority, protected classes, benefits, insurance, performance history, and skill set. If your business is considering making changes, let’s talk it through!
ABOUT LAURA RUBENSTEIN
Laura Rubenstein is the Chair of the firm’s Labor and Employment Practice Group. As an employment lawyer, she concentrates in general employment litigation, representing corporate clients and nonprofit agencies in a wide range of matters. These matters include the defense of federal, state and local discrimination claims, workplace and sexual harassment charges, ADA and ADEA claims, wage and hour issues, FMLA disputes, employment contracts, restrictive covenant agreements, general contract claims, employment-related and other business tort claims around the country. She represents clients before numerous local, state, and federal administrative agencies and courts across the nation, as well as in arbitrations, mediations and other alternative dispute resolution proceedings.
Mrs. Rubenstein also provides ongoing employment advice to businesses and organizations to implement effective employment manuals, policies and procedures. She conducts on-site management and supervisor training to help companies limit their liability. Mrs. Rubenstein frequently performs sensitive and discrete investigations related to claims and charges filed against high level company officials.
ABOUT OFFIT KURMAN
Offit Kurman is one of the fastest-growing, full-service law firms in the Mid-Atlantic region. With over 135 attorneys offering a comprehensive range of services in virtually every legal category, the firm is well positioned to meet the needs of dynamic businesses and the people who own and operate them. Our eleven offices serve individual and corporate clients in the Virginia, Washington, DC, Maryland, Delaware, Pennsylvania, New Jersey, and New York City. At Offit Kurman, we are our clients’ most trusted legal advisors, professionals who help maximize and protect business value and personal wealth. In every interaction, we consistently maintain our clients’ confidence by remaining focused on furthering their objectives and achieving their goals in an efficient manner. Trust, knowledge, confidence—in a partner, that’s perfect.
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