Question

ZeroCost is a management consulting company that was hired to advise Badvibe, Inc, a company that makes widgets (a fictional mechanical device). Badvibe wants to increase share value but does not tell anyone but its board of directors about its focus. Badvibe tells ZeroCost to create a range of financial plan options that “cuts the fat and the muscle down to the bone” of its hourly and middle management workforce due to an overly aggressive expansion strategy.  

ZeroCost is well known as having an anti-employee bias. It delivers options to Badvibe labeled A, B and C.

Option A proposes that Badvibe eliminate all salaried employees making over $75,000 that are within five years of retirement within 14 working days - this option will save the most amount of money;

Option B proposes that Badvibe eliminate all contract workers making over $50,000 by the end of the week – this option will save the middle amount of money; and,

Option C proposes that Badvibe reduce the non-salaried workforce 10% within 30 days - this option will save the least amount of money.

The Badvibe CFO directs that you advise the company on which option to consider. However, before you can advise the company, ZeroCost unilaterally sends an email to all employees of Badvibe stating that reductions in force are necessary due to economic conditions within the company. The email has a distinctly pro-management tone that suggests that no one’s job is safe. After reading the email, an employee has a panic attack and requires medical attention. Several other employees are observed leaving work early and angrily talking in small groups in parking lot. It is apparent that the Badvibe workforce is anxious about the potential of cutbacks and layoffs.

Analyze and discuss which option to recommend and include the following questions below. Must be in at least 150 words.

1. Potential legal issues as they relate to each option;
2. Relevant law to be applied to each option; and,
3. Ethical issues that exist in this scenario.

Answer 1

If we look at all the three options, there is a high probability that some of the employees might approach the court against their dismissal. Therefore it is the responsibility of the organization to look for that option that has least legal consequences.

Among all the three options, the management should go for Option C to propose that Badvibe reduce the non-salaried workforce 10% within 30 days. This is due to the fact that the non-salaried individuals are paid on an hourly basis and they are termed as nonexempt employee thus the legal issues related to this category of the individuals will be relatively less.

If we look at option A, this indicates that there might be the issue of age discrimination as one of the parameters to lay off the employees is their retiring age. While in option C, the employees can contest that there lay off was not based on any of the performance-based parameters.

Employees can file the lawsuit in option 1 under Age Discrimination in Employment Act (ADEA) where no discrimination on the basis of the age is permitted. In the case of option B, the individuals can sue the company on the basis of the Fair Labor Standards Act (FLSA).

The ain ethical issue n this scenario is whether it will be ethical for lying off any of the class of employees just to save the money for the organization. These employees have put their hard work and served the organization for so long years and now all of sudden they are forced to be laid off.