Labor and Employment Law Case Study

Excerpt from Case Study :

decision will need to be made about the future of each one. Each decision will be supported with an analysis of the situation using the relevant legal framework. In general, companies are allowed to terminate employees if the termination is part of a downsizing, which in this case it is. Naturally, however, the issue of severance will be raised, and must be taken into consideration for each of the employees in question. The format will be a discussion of each individual employee, his or her situation, but then the final decision about who to terminate and how will be conducted at the end of the report. The microbrewery is probably a qualified company, with at least 15 employees, or this discussion would not be taking place.

Employee #1 -- Mike Williams. Williams is a member of a protected group, being Asian. His performance has been above the median, which gives him a favorable position vis-a-vis any underperforming employees that there might be. He has strong educational credentials, and he has not had a track record of absenteeism. He has made a casual inquiry about labor organization. Another issue is that his position is being made redundant. Also, Williams has trouble communicating with the other employees.

Williams cannot be removed on the basis of his race (under Title VII) or because of his performance, which looks strong. His communication issues are not usually sufficient for dismissal. First, this could raise the specter of the dismissal being race-based. Second, for someone fluent in English it is unlikely that a minor communication deficiency is going to stand up if the dismissal is challenged. However, companies are allowed to remove employees for whom there is no longer a position. Under such circumstances, an employee can reasonably be downsized.

There is some issue about whether his enquiries about organizing are going to cause the company problems, should they decide that Williams is redundant. The National Labor Relations Act forbids the employer from firing an employee "because you join or support a union, or because you engaged in concerted activity for mutual aid and protection" (Department of Labor, 2012). In general, Williams' activities could be construed as such activity, though at this point the efforts appear to be informal. It would be unwise to release Williams on the basis of such organization activities.

Employee #2: Phillip Price

Price is not a member of a protected group under federal law. He could be under state law, but we do not know the state. His average performance does not make him exceptional or unexceptional in the company. His work with the company was predominantly with the project that has been discontinued. He has some practical experience, but no formal education. He has missed 17 days in the past two months.

Price's absenteeism problem stands out. No cause has been given for the absenteeism, but the company has also not asked. Still, 17 days in two months, which is less than 60 working days, is clearly exceptional. The employee cannot expect that absences to that degree that have not been addressed with management will not be a problem. The company has the right to discipline Price but before firing on the basis of his absenteeism, the cause for the absenteeism must be determined. If Price's absenteeism qualifies him for protection under the Americans with Disabilities Act (it does not appear to be the case) or the Family and Medical Leave Act (this is possible), then Price may be subject to certain protections for his absenteeism.

His performance and lack of fit with the organization going forward make a strong case for dismissal. Employees whose roles are now redundant can be removed, especially if they do not have the skills and experience to fill any other positions within the company.

Employee #3 -- Sally James

While there is no age limit for protection under the ADEA, there is often the implication that an older worker is being removed because of his or her age. James cannot be dismissed on the grounds of her age. There are two issues, however. The first is that she has no real role in the company any more, having been assigned to the failed marketing endeavor. Her performance with that endeavor was strong, however, and she bears no fault for its failure. It would be difficult, therefore, to remove James on the basis of her performance on the job, especially in light of her long history of excellent performance with the company.

James has also had significant absenteeism in the past two months. For a single mother, it is highly likely that there are extenuating circumstances. However, we do not know the reason for the absenteeism. That should be investigated before making a final decision about James, because she may be entitled to some protections under the Family and Medical Leave Act. Her personal financial circumstances are not relevant to the legalities of this decision.

Employee #4 -- Margaret Jones

Jones is a member of a protected group. She cannot be fired on account of being African-American. Jones has a bad perception among the employees, something that could factor into a performance evaluation, especially given the small size of the company and the inherent need of the team members to work closely with one another. However, her primary task is sales. Most of the division's sales came from her, but sluggish sales were a major problem with the division, so her performance cannot be said to be exemplary. She is recognized as being talented.

Jones also has a major absenteeism problem. The reason for this is not known, but again it should be investigated as she may be afforded some protections under the ADA or the FMLA. Her status as a civil rights activist makes for an interesting proposition, but if her on-the-job performance has been documented, then she can be dismissed regardless of how much trouble she might feel like causing.

Employee #5 -- Jenny Smith

As a Hispanic, Smith is a member of a protected group. She has an absenteeism problem, but this is related to her pregnancy. Likely then she will be afforded protections under the FMLA. The company knows what the problem is (morning sickness) and should be in a position to do something about it, either in terms of providing medical assistance or counseling (she is not the first woman to go through morning sickness while employed). Her personal financial circumstances are not relevant to the legalities of this decision.

Smith's performance is generally considered to be strong. Her skill set makes her an asset in other areas of the company. This makes it difficult to remove her, as there is no documented record of poor performance, and limited cause to claim redundancy.


In this scenario, three of the five employees are to be removed. From a legal point-of-view, the best way to view the issue needs to "who should we keep?" There are two reasons for this. First, this view prevents the company from laying off individuals on the basis of traits other than performance. Performance needs to be the critical trait that determines the future of the employee with the company. The second is that strategically, the company needs to focus on moving forward. The way to do that is not to examine in great detail what went wrong in the past, but to look at who can contribute to the company in the future. Those without significant future contributions to the company are apt to be removed as part of the layoff process.

Of the five employees, the ones who are likely to make the most significant contribution in the future are Jenny Smith and Sally James. Both have demonstrated that they are competent in their fields. Moreover, neither one displayed poor performance over the course of the failed marketing project. Both have skill sets that can be used in the future by the company on either ongoing operations or on other projects.

The three employees who should be terminated are therefore Mike Williams, Phillip Price and Margaret Jones. Williams and Price were both brought into the company for this project, and it does not appear that either of them has a role after the project. Both are IT professionals whose skill sets are not easily adaptable to other roles within the company. Jones is a sales professional, so her role is adaptable, but one of the reasons the project fell was because sales were sluggish. She simply did not succeed in her basic, core position with the company. Any employee can be terminated if their project was cancelled and their performance in the context of that project was below the acceptable standards.


All three of the terminated employees are members of protected groups, and two might have protections under the FMLA or ADA. Therefore, it is not recommended that any of them be removed on the basis of absenteeism, or anything other than performance. This means that the terminations will require an…

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