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End On A High Note

Entrepreneur, Sept, 2001 by Chris Sandlund

This year's corporate layoffs have displayed a couple of noteworthy trends. Companies like Amazon.com and Inside.com are forcing departing employees to sign nondisparagement clauses to prevent ill will from appearing in the press.

Jim Morris, principal with the Portland, Oregon, human resources consulting firm MBL Group LLC, says the practice has grown in many industries over the past decade, While these clauses neutralize laid-off workers, beware that they also tend to alienate your remaining employees. "When you create a climate of fear, the retention challenges are enormous," notes Morris.

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The desire to create a feel-good atmosphere may be why companies such as Cisco and Intel are sweetening the pot in pre-emptive layoffs.

When these firms rescind job offers, they give their would-be employees, particularly recent college grads, "apology bonuses"--cash for not getting the positions promised.

"It's a way of saying 'We feel badly about this, too. We'd like to have a good relationship with you in the future, as an employee or as a customer,' "says Judy Weil , executive director for the Northeast Human Resources Association in Wellesley, Massachusetts.

As your company grows, you may want to familiarize yourself with the little-noticed 1988 Worker Adjustment and Retraining Notification (WARN) Act. WARN forces companies with more than 100 employees to give 60 days' notice of a layoff affecting more than one-third (or 50, whichever is less) of its employees.

Morris says many smaller companies ignore WARN--often out of ignorance. "Most of the last 10 years have been growth years," he says. "We're obviously dusting [the law] off again."

CHRIS SANDLUND (csandlund@entrepreneur.com) writes about business from Cold Spring, New York.

Business Services Industry

End On A High Note

Entrepreneur, Sept, 2001 by Chris Sandlund

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