Deck 17: Downsizing and Post Termination Issues

Question 1

Which of the following laws has the most exacting requirements for a valid separation agreement?  ​

A)The Age Discrimination in Employment Act
B)Title VII
C)The Older Workers Benefit Protection Act
D)The Americans with Disabilities Act

Answer 1

C

Question 2

Under the WARN Act:

A)large employers are prohibited from closing plants or laying employees off for the purpose of defeating unionization
B)large employers must give their employees three months (90 days)advance notice of plant closings and mass layoffs
C)large employers must provide outplacement services to employees affected by plant closings and mass layoffs
D)large employers may have to give several notice of layoffs

Answer 2

D

Question 3

Regarding early retirement incentives, all of the following are true EXCEPT: ​

A)early retirement incentives are discriminatory if based on age
B)early retirement incentives may be offered to employees above a certain age, for example, age 55, but not, for example, also to those between 40 and 45
C)early retirement incentives are a legal way to reduce the workforce
D)early retirement incentive may be used to reduce the number of highly-paid employees

Answer 3

A

Question 4

An employer decides to downsize to cut costs. It plans to eliminate 100 jobs out of 250 total jobs. The employer notifies the employees' union representative on May 15.  The layoffs will be effective May 30. If the employer's action is legally challenged, a court would most likely decide:

A)For the employer because it is not large enough to be covered under the WARN Act
B)For the employer because there is no plant closing or mass layoff that would trigger the WARN Act's requirements
C)For the employees because they did not receive individual notification as required by the WARN Act
D)For the employees because they did not receive the amount of advance notice of a mass layoff required by the WARN Act

Question 5

Which of the following is NOT true of a trade secret?

A)it derives economic value from not being known to others
B)the owner must take steps to preserve its secrecy
C)it must be registered with the government
D)it can be protected with a nondisclosure agreement ​

Question 6

Imagine that you are the judge hearing a Motion for Summary Judgment. The case before you concerns the former Vice-President of Marketing at May Department stores, who has recently been hired by Victoria's Secret.  May Department stores has sued to enforce the non-competition agreement in which the VP agreed not to work for firms competing directly against May Department store. Both parties agree that both stores sell women's intimate apparel, but to different ages of women, and to different customer bases. They also agree that about 8% of May's business is women's intimate apparel, while 98% of Victoria's business is women's intimate apparel. What should you decide?  ​

A)even though both companies sell women's intimate apparel, there is no meaningful or material competition between them
B)when both companies sell the same category of products,  in determining whether the companies are in competition, the sale of the products is important, not the percentages of overall sales of the product
C)when both companies sell the same category of products, the fact that they both sell these products to women is important in determining whether the companies are in competition, not the ages of the women, nor the typical customer base

Question 7

The legal term for a reduction in force is downsizing.

Question 8

Downsizing should not be discriminatory, but the chief concern is age discrimination.

Question 9

Changes in benefit plans are under "serious consideration" when:

A)top managers meet to discuss implementation of a specific plan
B)the employer has firmly committed to offering the revised benefit plan
C)information has been gathered regarding alternative plan options

Question 10

The firm for which you have worked for 6 years has filed for Chapter 11 bankruptcy. What this means to you is:

A)you will receive your wages going forward without fail, as you are now a secured creditor
B)you are likely to receive your wages going forward, as they have a high priority in bankruptcy cases like this one
C)your union contract as to wages and benefits is null and void

Question 11

Which of the following employees is most likely eligible for unemployment insurance?

A)Vito is fired for continually refusing to wear a hard hat in a restricted area in violation of company policy
B)Ophelia quits her job because of a pervasive and continuing hostile environment
C)Steven quits his job as an English professor because he's insulted that a new hire in Management is getting a higher salary than he does

Question 12

Non-competition agreements:

A)are almost always enforced by the courts
B)will be enforced unless former employees can show that the agreements are overly broad
C)will not be enforced unless the former employer can show that they are no more restrictive than necessary
D)are less commonly used now than in the past

Question 13

Legal issues concerning downsizing include all of these EXCEPT:

A)the decision to downsize
B)the manner in which downsizing is implemented
C)prior notification of downsizing
D)the decision about which individuals to downsize
E)the cost of downsizing

Question 14

Which of the following is NOT a type of restrictive covenant?

A)non-competition agreement
B)non-solicitation agreement
C)non-disparagement agreement
D)non-convergence agreement

Question 15

To be eligible for unemployment insurance:

A)the employee must be involuntarily unemployed
B)the employee must be willing to perform any work that is offered
C)the employee must be available to work within 90 days of becoming unemployed
D)the employee must go on interviews at least 20 hours per week

Question 16

A 55 year old supervisor who has always received good performance appraisals is downsized. Two younger (42 and 45 year old)supervisors from the same department, whose performance had been rated lower, were nonetheless retained.  The employer says that it had to save money and that the older supervisor earned considerably more money (he did).  If the termination is legally challenged, a court would most likely decide: ​

A)For the employer because employee could not establish a prima facie case of age discrimination under the ADEA
B)For the employer because the employees retained were also over 40 years of age
C)For the employer because it had a lawful, non-discriminatory motive for the termination
D)For the employee because the employer has engaged in disparate treatment based on age
E)For the employee because salary level is a neutral criterion that creates adverse impact against older employees

Question 17

An employee was part of a RIF if he is replaced afterwards.

Question 18

If an employer files for Chapter 11 bankruptcy, employees are in a better position than they would have been under other forms of bankruptcy.

Question 19

A 52 year old employee with 34 years on the job was downsized during a RIF. On a new performance scale prepared for the RIF, the one item at which she excelled was eliminated, and she scored badly, compared to a younger worker with less experience. The younger worker was retained. Earlier that same year, the supervisor of the 52 year old had rated her as "doing a great job." She sued under the ADEA. On a Motion for Summary Judgment, what should the court decide?

A)for the employer, because the employee scored poorly on the performance scale
B)for the employer, because the employee had not conclusively proven that she was terminated because of her age
C)for the employee because she had proven age discrimination in her termination
D)for the employee, because she had raised material questions of fact, so that summary judgment was reversed, and the case remanded for trial

Question 20

An employer who closes the business rather than deal with the union his employees have formed: ​

A)does not violate the National Labor Relations Act
B)violates the National Labor Relations Act if it can be proven that the motive was hostility toward unionization
C)must bargain in good faith with the union before deciding to go out of business
D)is required under the WARN Act to give the employees 60 days notice

Question 21

Why is each of the following good legal advice?
a.Before outsourcing or relocating work to another plant, unionized employers must negotiate with their employees' unions
b.Employers should have clear, objective criteria for deciding which employees to downsize
c.Whenever possible, employers should offer employees selected for downsizing the opportunity to transfer to other facilities.
d.Employers should be careful when executing waivers of legal claims in exchange for early retirement offers.

Question 22

What are some of the tools that you can use to part ways with an employee on a friendly basis, and avoid trouble and  lawsuits?

Question 23

Because of the worsening economic situation, your firm needs to drastically cut back, and downsize up to 40% of its workers. The firm has a reputation and tradition of being a firm that rewards the good skills and loyalty of its workers, and many have been with your firm for more than 30 years. The firm has been in your family for more than 100 years, and you are the 3^rd generation CEO. Frankly, what would help the most is to lay off all of those workers who are earning in excess of $80,000/year, retaining those who are earning between $40,000 and $50,000/year. That would reduce your overhead dramatically (and your health insurance costs). But almost all of the workers who earn in excess of $80,000 are age 50 or over, and unlikely to ever find comparable jobs elsewhere. Which of the following options would be consistent with your firm's core values and its long-term survival? ​

A)downsize all workers making in excess of $80,000/year; since salary is the only consideration, the action is legal
B)offer significant early retirement packages in exchange for a waiver of claims to workers earning in excess of $80,000/year; it may cost you in the short term, but it is consistent with your family's legacy and the firm's core values, and ultimately will help the firm's long-term survival
C)do a targeted review of the skill sets of all employees, including those earning less than $80,000/year, to determine where there is an overlap and you can afford to let people go without damaging the firm's knowledge and skill base; downsize the people who are earning the most in each skill set, whatever their ages
D)either b or c might be consistent with your core values and long-term survival

Question 24

Regarding restrictive covenants, which of the following statements is NOT correct?

A)restrictive covenants help protect an employer's business assets
B)restrictive covenants are upheld only for top level managers and CEOs
C)restrictive covenants attempt to curtail many types of competitive conduct

Question 25

Regarding the bankruptcy filing of an employer, which of the following statements is NOT true?

A)employees are secured creditors
B)employees are unsecured creditors
C)employees as creditors stand high in priority in a Chapter 11 bankruptcy filing

Question 26

With regard to unemployment insurance, which of the following statements is true? ​

A)only workers who have been fired are eligible for unemployment insurance ​
B)only workers who quit are eligible for unemployment insurance
C)only workers who are involuntarily terminated are eligible for unemployment insurance
D)employers should routinely context all claims for unemployment insurance