Navigating the Downsizing Minefield

In the wake of Sept. 11, a slumping economy and ongoing military action in the Middle East, rental car companies operate in an unprecedented climate of uncertainty. Air carriers are filing for bankruptcy with troubling regularity, leaving rental car companies wedded to airport traffic in grim straits. Wildly fluctuating fuel costs also threaten the industry.

The good news is that the car rental industry remains somewhat flexible. Companies can mothball portions of their fleet to stay lean. The bad news is that such retrenchments usually result in significant staffing cuts. Even modest downsizing can spell trouble, especially when disgruntled former employees face few reemployment opportunities. Media-covered mass layoffs and greater communication between displaced employees only fuel the litigation fire.

Despite the pitfalls associated with major reductions in workforce, car rental operators can take steps to avoid lawsuits — or at least make them easier to defend.

The “Big Three” Statutes
Most jurisdictions in the United States have an “employment-at-will-policy,” meaning an employer may — theoretically — terminate a worker for a good reason, bad reason or no reason at all. That said, there are certain characteristics, defined by statute, which cannot form the basis for termination. An alphabet soup of laws passed and refined over the past 40 years prohibits employers from making employment decisions based on such taboo reasons as race, gender, age and disability.

The Age Discrimination in Employment Act (ADEA) (29 U.S.C. §§ 621 to 634) Historically, the group most affected by downsizing is older workers. The ADEA, however, makes it unlawful for an employer to discriminate against employees on this basis. The ADEA covers employers with 20 or more employees, and protects those age 40 and over. Some state and local statutes have even lower age thresholds. ADEA cases are initially processed by the Equal Employment Opportunity Commission (EEOC) or an equivalent state agency, and can later mature into federal court lawsuits. In addition to allowing recovery of lost wages and benefits, attorneys’ fees and even reinstatement or front pay, the ADEA provides for double damages in cases involving “willful violations.”

CONTINUED:  Navigating the Downsizing Minefield
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