Legal Issues in Reduction of Workforce Simulation: FastServe, Inc.
FastServe, Inc is a marketing company of sports apparel with revenues of $25 million dollars and a workforce of 350 employees. In order to target the population interested in sport activities, also known as Generation Y, FastServe opened an online marketing and distribution channels. One of these channels is for boys and the other one for girls. The company transferred 10% of its workforce over the online distribution department. Nevertheless, website issues concerning the 3-D drape-n-see mannequin made the downloading process for customers very difficult. As a result, customers are not being able to order products due to this problem. The lack of online sales has led the company to downsize the company’s workforce.
FastServe, Inc must make planned decisions concerning the process of downsizing the company. Management needs to take into account the potential discrimination claims that the company could face by its laid off employees. They need to base their decisions not only on individuals’ skills or their contributions to the company, but also how these individuals can be dismissed in an ethical and a legal manner. Obviously, the downsizing of the company is inevitable after their decision of leaving the online distribution market. However, FastServe management still facing the dilemma concerning who will be suited to perform new tasks in accordance with the company’s new direction and who will need to leave and look for other opportunities outside the company.
This paper addresses the issues related to the legal aspects concerning the reduction of workforce in FastServe, Inc. It also provides insights of the legal issues that the company may face and suggestions about employees’ termination by taking into account several aspects; such as the company’s best interest and employment laws.
The decrease of profits due to the lack of online sales has forced the company to cut costs and change its business direction. By taking into consideration legal implications and the skills and performances of the candidates, the company has decided to lay off three employees out of five. Two of these employees hold a contract status. Their status can lead to issues related to implied contract. The company will review this issue and decisions will be based upon the state where the contract was signed and the nature of the terms of the agreement
Brian Carter
Brian is the solely responsible manager for the programming 3-D “drape-n-see” mannequins for the company’s online market.
Cost cutting, discontinuation of product or services ,technological changes, and consolidation due to mergers and acquisitions are commonly legal ac...
The primary stakeholders in this case is the employees and managers who are being fired and having to firing good employees because of the change in the companies policy. The customers who are receiving poor service because of the conduct and e...
Since key personnel of other companies are certainly going to face the risk of losing their jobs if they decide to accept the K.I., Koke International, 50 percent raise, then Vicky must consider the key personnel’s right to be informed about the aftermath of such a decision. Wendy McGee, Vicky’s boss, has made it clear to her senior staff members that key personnel of the other five player companies will be fired once they finish training K.I. employees. Vicky must consider the fact that those key personnel have the right to be informed about K.I.’s future plan, which will affect their careers.
Due to the good establishment of the business, it has huge market national. The company has therefore opened many retail shops and stores all over the country to ensure that their products are accessible to the customers. The entity provides a favorable environment, and many clients view the place as a fun shopping place to be. The retailer has targeted a big pool of customer because of the variety of products it sells. The stores products vary from kitchen goods, jewelry, and electronics clothes to hardware
Employment at will is a law that is present in all fifty states in the US; although, in Montana there requires a stated cause for termination. Employment at will creates dissent among employees when they have been terminated for a cause that is thought to be unsubstantial or when no cause is given. There are pros and cons to the presumption, and employees and employers have different views. Employment at will means that the employer can terminate an employee at any time, for any cause without warning. However, even an at-will employee cannot be terminated because of discriminatory reasons. Employment at will also means that an employee can leave a job at any time without the fear of facing any legal consequences. An employer can also change the terms of employment without notice and no penalties. Throughout this paper, the two sides to employment at will will be discussed, and different examples of employment at will cases will be given. At its most basic, employment at will is not the best path because it can create feelings of violation and betrayal in the employee and can create a negative public opinion or loss of profit for the business.
The other problem people face with many other online clothing retailers is the inconvenience caused if they need to return a product. With our service, the customer does not pay the price for the product and has considerable amount of time to come to a decision as to whether or not to buy the product. This removes any remaining doubt in the customer’s mind and increases customer confidence levels.
In dealing with a person’s livelihood, and often, sense of self, it is of no surprise that ethical issues regarding employment practices are of great concern. The issues of employment at will and due process contracts in the workplace are among the most widely contentious in the realm of employment. Employment at will is the doctrine that employment may be ended, by either party, for good, bad or no cause at all.1 Due process, on the other hand, is the employment practice in which a person may appeal a decision as a means of receiving an explanation and the opportunity to argue against it.2 Employment at will is the standard in the majority of private corporations today and is argued for relentlessly by freedom of contract enthusiasts, however, it is becoming ever more apparent that employment at will contracts reflect the old corporate maxim where the single bottom line, profit, is accented and the well being of other stakeholders, in this case the employee, are of little or no influence. Due process should be accepted as the prevalent employment system as it shelters employees from the hostile actions of the more powerful employer, provides a stable, bilateral contract between both parties and portrays the growing ethical concerns of society.
Corporate Downsizing Organizations in every segment of business, industry, government, and education are downsizing. Downsizing is and has been a controversial phenomenon in the last few years. The controversy that surrounds downsizing may be better described as a debate in organizational theory about whether change is adaptive or disruptive. The issues which establish the outcome of the controversy include why the downsizing is taking affect, how it is implemented, and what steps are taken to enhance its effects on organizational performance. The reasons for corporate downsizing are presented in many forms. Some companies downsize due to technological changes such as automation, which brings about the need for a reduction in the production workforce. Others may feel that competitiveness with other companies warrants the need for a reduction in the workforce. Financial setbacks due to customer demand, market shares, and loss of revenue could also initiate the need for downsizing. When will it end? Experts say it won't. For instance, the North American Free Trade Agreement (NAFTA) was established as a universal trade agreement between the US, Cannada, and Mexico to allow free imports and exports.
While implementing solutions to the high turnover rate, companies must know and understand the law. The law is created and enforced by the government to prevent any discrimination or biases between the company and employees. It also prevents the strong, corporations, from taking advantage of the weak, employees.
Bennett-Alexander, D.; Hartman, L (2012) Employment Law for Business 7th Edition. New York, NY. McGraw-Hill Companies Inc.
The willingness of companies to swiftly lay off workers to cope with changing business environments.
Layoffs are one means by which an organization can reduce expenses with the intent of improving its bottom line. Despite being typically performed as a last resort, layoffs often have a negative impact on the remaining workforce. As a manager, there are numerous areas for concern in managing the workforce going forward. The human costs related to downsizing are “immense and far-reaching” with one of the most profound being survivor syndrome according to Hanson (2015, p. 187). Also known as survivor’s guilt, this condition relates to the emotions felt by those still employed and some of the effects include decreased motivation, moral, and job satisfaction, as well as an increased proclivity to search for other employment. This volunteer turnover being another grave concern for managers, and retention of the remaining workforce is usually dependent on their existing perception of the organization and its culture (Sitlington & Marshall, 2011). Also relayed by
In addition, since more shoppers are loading up on online shopping style when they can not spent time to shop because of busy work. Asos, an online market leader in the online shopping industry, announced that its sales of maxi-dresses and festival wear helped its sales has rose by 54% during the first quarter this year (Jessup). From this point, fast fashion could consider the possibility of online business and gain a share of the market.
The apparel industry is a really important industry in terms of investment, revenue and trade and employment globally. Within the industry there are short product life cycles, an immense product portfolio, unpredictable customer preferences and opaque supply chain processes. (valueline.com, 2013)
store managers and frontline personnel, play a critical role in the context of Zara’s business model. Using customised PDAs, store managers constantly communicate customer feedback, either hard data such as orders and sales trends or soft data like customer reactions to a new style or the “buzz” around a new design, to Zara’s HQ where the feedback is used by designers to quickly develop new garments based on customers’ wishes (Ferdows et al., 2004). Frontline employees assist their superiors in collecting the feedback. Zara’s store managers and shop assistants thus close the communication loop between shoppers and Zara’s HQ (Ferdows et al., 2004) and therefore contribute hugely to Zara being able to first understand what customers like and then design and produce it (Buck, 2014). Accounting for their key role, Zara pays store managers an above-average salary and up to 100% of their salary in bonuses if they hit sales targets (Ruddick,