Legal Issues in Reduction of Workforce Paper

FastServe Inc. is a $25 million company in the direct marketing of sports apparel industry. The company has 350 employees. In an effort to concentrate sales on America’s sports oriented generation Y clientele, the company made a strategic move into an online sales approach.

With this strategic move, FastServe moved 10% of its employees to manage the online stores and try to increase sales. The company also created and implemented a program for the websites that served as virtual mannequins, called ‘3-D drape-n-see’. At first, the 3-D mannequins attracted many new customers from the targeted age group; however, soon after the websites went live, they realized that potential buyers were not staying on the website and completing transactions because the program was too cumbersome to download.

FastServe realized that the 3-D mannequin technology was not worth the costly investment for the amount of business it created in return. Due to the problems with the website main marketing tool, the company opted to move out of the online sales, thus creating the inevitable need for downsizing.

A decision needed to be made to select which employees would be laid off and which ones would be retained. FastServe management decided to base this decision on the employees’ past performance as well as skill level. After several meetings with FastServe’s senior management team, the company’s COO had given a list of five people being considered for layoffs to the senior HR manager. Out of the five, only three individuals would be laid off and the other two would be retained with new job definitions.

After referring to HR and performance records in the last two years, the HR manager needed to come up with the final three as well as communicate the decision to the selected employees within a week. Various factors needed to be studied and analyzed to make sure that FastServe did not break any employment laws or would not end up being sued for any type of discrimination. The five employees’ key factors for being laid off, and any possible problems that FastServe could face associated with the concepts of employment law are illustrated in the following table:

Candidates for Dismissal Key Concepts of Employment Law

Carl Haimes Mr. Haimes is a gay man who has voiced his discomfort about some of his coworkers, especially Ben, the accounts manager, about making some very rude comments about his sexual orientation. However, Reed, Shedd, Morehead and Corely (2005), state that “The courts have not interpreted Title VII to prohibit discrimination against employees based on their sexual orientation, or whether they are gay, lesbian, bisexual, or heterosexual. Instead, the courts have defined the word sex in Title VII to refer only to gender, to whether someone is female or male” (p. 29).

The issue was brought up by Mr. Haimes to HR management. Furthermore, no considerable deficit in performance is shown in Mr. Haimes’ case, and along with the fact that he is gay it could very well create a termination with discrimination problem for the company.

Brian Carter Mr. Carter is a very good employee. His colleagues refer to him as ‘the model’ for his hard work on the 3-D mannequins program. However, Mr. Carter has been diagnosed with carpal tunnel disease due to excessive strain on his right wrist. His coworkers have noticed that he is in tremendous pain and it takes him a very long time to perform regular tasks. Furthermore, Mr. Carter’s programming experience would not be a good fit for FastServe, since the company is moving away from the online marketing and sales.

Under the ADA, disability is defined as any physical or mental impairment that substantially limits one or more of an individual’s major life activities. Physical and mental impairment includes physical disorders or conditions, disease, disfigurement, amputation affecting a vital body system, psychological disorders, mental retardation, mental illness, and learning disabilities. Major life activities include the ability to perform manual tasks, walk, see, hear, speak, learn, breathe, care for oneself, or work. (Reed, et al, 2005, p. 464)

Even though the law protects employees from being discriminated against on the basis of disabilities; Mr. Carter’s case can be strongly argued on the basis of his skills not being a good fit for the company’s new sales and marketing processes.

Sarah Boyd Ms. Boyd is a 53-year old clerk in dispatch, who has been with the company for 15 years. She has been a loyal employee and knows her job real well; however, the dispatch processes are being automated and her skills would become redundant. FastServe’s attorney believes that Ms. Boyd would not be a threat to the company from a discrimination stand point; however, Nora Manson, another layoff candidate, may get something started.

Ms.