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Employment attorney: 3 principles can lessen pain of Zoom layoffs

BOSTON, MA — When more than 900 Better.com employees logged onto a Zoom webinar last December, the mortgage company’s CEO got right to his point.
“If you’re on this call, you are part of the unlucky group that is being laid off,” Vishal Garg can be heard saying in a recording that has circulated widely online. “Your employment here is terminated effective immediately.”

Garg then compounded his problems by posting a series of messages on the networking site Blind, trashing some of the laid-off employees as people who were “stealing from you and stealing from our customers” by logging hours they had not actually worked, according to a story in Fortune.

Garg’s impertinence first led to an apology and then a month-long sabbatical “to reflect on his leadership,” the company announced, though he was back at the helm by mid-January.

Obviously, Garg could have managed the situation better. But is there an effective way to do a mass layoff by Zoom?

According to Boston employment attorney Walter M. Foster, there is, at least to a point.

The Eckert, Seamans, Cherin & Mellott member suspects Garg will not be the last to reflexively turn to Zoom as a preferable alternative to a mass-mailed letter, given the way online meeting platforms have become so enmeshed in the modern workplace.

But what many CEOs may not appreciate is that such news will hit individual employees very differently.

“Their significant other could be facing COVID or cancer — a situation where their personal life is really not in a good place — and [the layoff] breaks their back,” Foster says. “They have people literally crying [on Zoom].”

Had Garg been, say, the supervisor of a warehouse, it may have occurred to him that gathering them all in one big room to announce a mass layoff was not the best plan.

But the pandemic has weakened the bonds between employers and employees, Foster believes.

While employees may have undergone a modified form of virtual onboarding, it has grown easier for CEOs to view employees they have never met as mere “widgets,” Foster says.

“In the last few years, there have probably been zero in-person team-building events, let alone holiday parties,” he says.

But if a company leader feels like he has no choice but to execute a layoff remotely, Foster has three “guiding principles” to offer: “Be respectful, be compassionate, and be prepared.”

That means, primarily, one-on-one Zoom sessions with affected employees, despite the time commitment involved, Foster says.

A limited exception might be if the company’s financial struggles are already well known throughout the workforce. In those instances, a larger Zoom meeting to present general information might be OK, according to Foster.

But otherwise, individual conversations are preferable, he says.

“Some people will be like, ‘This is great because it’s such a great market right now, I know I’m going to find another place, and maybe I can collect unemployment.’ But that’s not everybody,” he says.

Of the three principles, “be prepared” is the most important, Foster says.

One of the best forms of preparation is to determine what kind of severance packages and outplacement services the company is prepared to offer and then think through carefully how to communicate that information.

“It’s a bit of the stick first — ‘you have no job’ — but there’s at least a carrot,” he says.

The other thing employers need to be mindful of with Zoom is that people can record the session, so company officials need to take care not to provide any fodder for future litigation.

That can be as subtle as announcing that the employees of a particular division are being let go, when it’s common knowledge that everyone in that division is over the age of 50.

“You have to think through ‘what are the possibilities’ and ‘are you treating everybody fairly,’” he says.

In addition to highlighting the way the company is trying to mitigate the impact of the layoff on the employee, the company’s message should include information about why it is taking the action, which can blunt any inference of an improper motive, Foster says.

It is also advisable to keep the employee at the center of the conversation, rather than the company. That means, where appropriate, recognizing the work the person has done.

“In today’s world, it’s not common that you have 30-year employees anymore, so it’s made this in some ways a little bit easier,” Foster says.

A common misstep for CEOs, though, is not knowing when to stop talking. That often leads to unrealistic promises, like raising hopes that the company will be able to hire back laid-off employees when it turns the corner financially.

“The messaging is so critical, because it can beget litigation of promissory estoppel, discrimination — you pick it,” he says. “Unfortunately, people [who are laid off] are pretty litigious.”

Even as the pandemic loosens its grip, Foster suspects working remotely, at least part time, is here to stay, which means so are remotely conferenced interviews, performance reviews and, yes, even layoffs.

“I think it’s part of the landscape and people better get used to it, particularly employers who think, ‘Oh, everybody’s going to come back into work,” Foster says. “You’re going to adapt, or you’re going to fall by the wayside in some ways.”