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The Big Uneasy (Part 2): Communicating with Managers about an RIF

When top management is uneasy about the ongoing success of a company, rumors about the fallout of that uneasiness are hard to contain. While it will not stop the rumors completely, prior to any reduction in force (“RIF”), there needs to be a plan for communicating with upper-level managers who will be responsible for implementing the RIF. If you have created a good business plan — as we suggested in our prior post in this series — that is probably the first thing that should be discussed with those persons who will be involved in the process of selecting employees whose positions will be eliminated. This means that any managers upon whom the company will rely to make such selections must be brought inside the tent, so to speak, early in the process.

I have seen the fear that managers will leak information lead to rushed, last-minute selection processes because managers were not informed earlier. Rushing the selection of the employees impacted by an RIF leads to mistakes that can have both business and legal consequences. Moreover, managers who are kept in the dark until the eleventh hour can inadvertently create more confusion when confronted by suspicious employees.

On the legal side, there needs to be a clear methodology — supported by the business plan — that is spelled out for the managers as to how employees will be selected. Managers also need to be informed of the importance to consider the tasks done by each employee so that, in making their selections, they can ensure that any vital business and legal matters can be covered by the employees who will remain.

The selections made by managers also need to be vetted for how they will impact protected groups. Decisions that are not consistent with recent evaluations should also be questioned because managers are often more susceptible to personal feelings and relationships when making decisions that could result in an employee’s termination. With good, early communication with the appropriate managers, this process, while always difficult, can at least be controlled so as not to unnecessarily expose the company to business or legal risk.

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.