Hrer 501 - Legal Analysis

HRER 501: Assignment Fourteen

Nicole Mercadante

Pennsylvania State University

Legal Analysis

1. Our first concern is whether age discrimination is occurring in the workplace of BSF due to the CEO’s, Mrs. Dietz, close alignment with recent HRER graduates from Penn State. A few of the long-term employees have complained that the young new hires receive disproportionate recognition and high performance reviews and this is due to the youthful Mrs. Dietz’s preference for young talent. However, the ADEA is not intended to protect older workers from the harsh realities of common business decisions and corporate reorganizations. High performance evaluations and recognition is not enough evidence supporting the case that age discrimination has taken place at BSF.
2. Our next concern is that BSF employs 40 people at their administration offices and 90 at the Bellfonte manufacturing plant which is represented by Teamsters Local 8 with Paul Whitehead as president. Therefore, we must reference the collective bargaining agreement when dealing with the union employees at the Bellfonte manufacturing plant. The BSFGC startup company does not a any union representation.
3. Mrs. Dietz used funds from BSF to establish BSFGC and the new startup is run by *Doug Allen however it is rumored that Mrs. Dietz is still a behind the scenes decision maker at the new company. The relocation of company funds could be linked to unfair labor practice because Mrs. Dietz is downsizing at BSF and increasing business priority at BSFGC. This could be an interference of union activity because BSFGC isn’t related to union activity whereas BSF already has a union established.
4. BSF employees are protected by the WARN Act which states that a 60-day written notice must be provided to employees prior to closing or a massive layoff. This act covers employers with 100 or more employees full time or 100 or more employees full and part time with 4,000 aggregate hours per week. Since Mrs. Dietz requested all part time positions be eliminated including the laborers due to a decline in financials 30 days ago, this would be a violation of the WARN Act if notice was given at the date requested or within the next 30 days.
5. Providing employees with just one notice when multiple layoffs occur is not enough to protect the employer under the WARN Act. Multiple notices must be provided in a timely manner unless each layoff happens for very distinct reasons. Since Mrs. Dietz is laying off employees due to financials this would be labeled as one single cause under the WARN Act rendering her liable for multiple notifications.
6. Liability under the WARN Act can be avoided if closure of the BSF company is given without notice so long as transferring to the BSFGC facility is available to the terminated employees. The court would rule that the terminated employees did not suffer employment loss because a transfer of employment was provided after failure of notice whether they took advantage of the opportunity or not.
7. Due to the continued decline in financials at BSF, Mrs. Dietz’s is considering closing the company for good following the massive layoffs. Since the Bellfonte manufacturing plant is represented by a union, Mrs. Dietz’s is legally liable to bargain in good faith with an impending closure. Although Mrs. Dietz’s requested that the CBA be followed when selecting which union employees be terminated, she must still consult with the union representatives.
8. When discharging employees, there must be clear objective criteria which should be in place prior to the downsizing decisions, application of this criteria must be consistent, and ageism must not be used as termination factor. The issue at hand is that Mrs. Dietz’s has no criteria in place when implementing layoffs and her reasoning for laying people off is inconsistent. For example, Mrs. Dietz’s first made layoffs by hours worked and terminated all part time employees at BSF. She then laid off full time non-union employees based on last year’s low performance scores and union employees based on the CBA. Therefore, Mrs. Dietz’s doesn’t have any criteria or consistency established when making layoff decisions.
9. This then leads us into the idea that Mrs. Dietz’s may be guilty of discriminatory discharge based on age because it was previously noted that the young new hires are given proportionality higher recognition and performance reviews over the more tenured employees at BSF. So, if Mrs. Dietz is terminating employees based on low performance scorecards, then would this group of disgruntled employees be the ones to go in the second layoff wave? We would have to look at the selection procedures to determine if a disproportionate number of people selected for downsizing were over the age of 40.
10. The severance policy states that employees who accept its term and conditions are eligible for one week severance pay for all years worked in exchange for a release waiver for all claims against BSF. When we look closely at the severance policy it violates the ADEA because it does not specifically refer to it when suggesting a lawyer consultation. The policy also says nothing about supporting consideration which is another violation. Therefore. The severance policy is not compliant with ADEA requirements.
11. After the initial reduction in personnel at BSF, the NFL announced the conversion to artificial turf which would mean a dramatic production increase for BSFCG. Therefore, Mrs. Dietz may be guilty of insider trading because she realizes that this change would create a high demand for artificial turf therefore eliminating the need for turf fertilizer making the need for BSF goods obsolete. Therefore, Mrs. Dietz’s investing into a new company and keeping the dire future of BSF away from employees is indicative of insider training.
12. Dietz asked for the financial standing of BSF to be kept under wraps so as to not scare away current customers regardless of the impending closure. This neglect to share financial information business partners is another form of insider trading.
13. The head of Teamsters Local 8, Mr. Whitehead, requested documents demonstrating the financials of the company that would support the need for layoffs. This request was denied due to Mrs. Dietz’s concern for releasing confidential information. However, by law the employer is required to release this information when there is a union relationship present. If Mrs. Dietz’s does not produce such documentation, then she may be liable for neglecting to bargain in good faith.
14. Non-soliciting agreements: non-union employees of BSF can’t solicit customers during employment and 3 years after employment with BSF. This doesn’t apply to the employees at the BSF manufacturing plant.  Mr. Clark shortly after the closure announcement accepts a job with BSFGC competitor, Dr. Turf, and uses his inside knowledge to meet with Penn State for potential agreement to install their new artificial turf. Penn State is a well-known major client of BSF. Which resulted in Mrs. Dietz’s requesting that we initiate the non-soliciting agreement.
15. Mr. Clark may be guilty of trade secret since he worked for Dr. Turfs competitor before accepting the job. However, this may not hold in court because he took the job shortly after BSF closure announcement. Secondly, BSF has already announced their closure therefore canceling the terms and conditions of the non-solicitation agreement. Therefore, the non-solicitation agreement wouldn’t hold up because without an operating profitable business, competitors due not exist which cancels the need for a non-solicitation agreement.