Layoffs and Mergers and Consolidations and Acquisitions…OH MY!
In recent months, businesses and institutions in the Philadelphia area have experienced a number of closures, mergers, consolidations and acquisitions which will be devastating to the greater geographic area, and have or will result in major layoffs of skilled employees and elimination of future jobs.
Here are just a few examples:
- The owner of Hahnemann University Hospital, in existence for 171 years, announced that it would be declaring bankruptcy and closing;
- Drexel University, announced that about 40 percent of its physicians and clinical staff of its medical college will lose their jobs in the wake of the closure of Hahnemann University Hospital;
- Philadelphia Energy Solutions announced that it was closing its South Philadelphia oil refinery due to a series of explosions and a catastrophic fire, and laying off more than 1,000 employees;
- WSFS Financial Corporation acquired Beneficial Bank, founded in 1853, with 58 locations in Pennsylvania and New Jersey, and is rebranding as WSFS Bank.
It is no wonder that employees are justified in feeling insecure. Mere months after the good economic news that the unemployment rate has dropped significantly, and that employees now have their choice of jobs, salaries and benefits, comes news of major layoffs, mergers, consolidations, acquisitions and business failures.
In addition to the economic impact of such upsetting news, there is the devastating personal impact on the lives of employees and their families, which may result in the permanent loss of long-term jobs and careers, having to accept lower income jobs or shift into gig-economy jobs, or being required to leave the area or downsize their lifestyles.
Having represented thousands of employees throughout my career, the following are my recommendations to employees in order to protect themselves in view of major layoffs or terminations, as no one is indispensable in our current marketplace.
- Employers prefer it when their workforce is collegial, respectful of each other and aligned behind their company culture, vision and/or mission. While employers may have “open door policies,” workplace policies outlined in handbooks or online, social media policies, and staff human resource departments, I suggest that employees think long and hard about making a complaint and what they hope to accomplish by making the complaint. Complaints about co-workers, getting involved in co-workers’ issues which are not directly related to the employee making the complaint, or disagreeing with managers and supervisors, can often set off an investigatory process, and that process can boomerang, at the expense of the complaining party.
- The employees making these complaints generally have the burden of proving them, and that often means hiring a lawyer to assist with presenting these complaints. The complaints also mean that the employer must spend time and resources investigating the complaint, and they risk making a decision that may adversely affect them in the long run. The person who is making the complaint and the person complained about have equal rights, so if the person complained about is disciplined or terminated, that person may allege the employer acted wrongfully and the employer will have to defend themselves, costing them more time and money.
- An employee should consult a lawyer if they are going to need extended Family Medical Leave Act time or they wish to make a claim for short term disability, long term disability, or workers’ compensation. These leave requests and policies are difficult to navigate and often conflict with each other. They can also result in terminations if they are not handled correctly and the specific legal and company requirements to make these leave claims are not followed. Also, employees have to be mindful that recommendations from their doctors do not necessarily control their employers. Employers are not required to provide indefinite leave, or hold an employee’s job open, simply because a doctor does not release an employee to return to work.
- A lawyer should be consulted as soon as an employee has been given a performance improvement plan (“PIP”). Few employees survive PIPS and being given a PIP is often a good clue that an employer is seeking to find a reason to terminate an employee. It is important that a PIP is followed by the employer, but even an employee’s best efforts to meet the terms of the PIP may not result in keeping their job. A PIP is also a good opportunity for an attorney to attempt to negotiate a severance package for an employee, as an employer may be interested in offering such a package if the employee voluntarily agrees to leave.
- If an employee belongs to a union it is still a good idea to consult an independent lawyer. An employee rarely interacts with a union lawyer except for a short time at some later point in a legal process, and that point may be far down the road from when a lawyer should have been consulted. Union lawyers also represent their union, and may have conflicts in trying to divide their representation among a number of union members who have similar issues. Also, not every union represents its members for discrimination complaints and disability issues, so it is important that employees make certain that they meet the often stringent filing requirements involved in these matters.
If an employee has doubts about what is happening in their workplace or with their position, or they have received a performance improvement plan, they should consult a lawyer and not wait until they have been disciplined or terminated. Talking to a knowledgeable employment lawyer can bring clarity to the situation and assist them in how to address their problems with the least risk to themselves.
Originally published in The Legal Intelligencer on October 28, 2019 and can be found here.