Yes, if the employer has solid written documentation of the business purpose for the RIF, as well as defendable reasons for how and why employees were chosen for layoff.
After a company has determined that a RIF is the best way to meet the financial goals for the business, a business analysis should be conducted to determine the employees who will be affected. Nondiscriminatory employee selection criteria should be developed and used to select the employees who will be laid off.
Performance criteria may be used and employers may consider previous performance reviews and other performance documentation, such as warnings or any type of disciplinary actions. Employers may also wish to use seniority as a determining factor.
However, a RIF is based on a business need to cut costs or to better align resources so the business is able to meet overall goals and objectives—and it is not the best way to manage performance issues. Laying off employees with performance problems, who are in necessary positions, may create problems for the company. The employer will need to fill the positions, and this could lead to claims of wrongful discharge or discrimination.
Using a RIF to manage performance can also lead to morale problems with staff who remain employed. Employees often can see when their peers have performance problems. When strong-performing employees find out that poor-performing employees received severance payments and management didn’t address the performance issues, it can lead to decreased respect toward managers, as well as waning employer loyalty and increased turnover.
Please Note: This material is provided as general information and is not a substitute for legal or other professional advice. Contact the Knowledge Center for more information
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