If a financial institution is implementing a large-scale layoff, involving 50 or more people, the Workers Adjustment and Retraining Notification Act of 1988 requires that the affected employees must be notified at least 60 days in advance.
The only exceptions would be if there was an impending threat of being seized by the regulators, or the financial institution is already in receivership, and there is a reasonable excuse. The regulators would then release a bank or a savings and loan from liability under the 60 day rule.
Management must prove they acted in good faith, and may present a number of voluntary options. These might include reduced working hours, the option of early retirement, or enhanced severance packages.
Employees who have received an excellent review, when chosen for layoff, are sometimes confused by the signals they got from management. For this reason, outplacement consultants are advising financial institutions to do more detailed and structured evaluations. They reason that even if the manager finds the task unpleasant, it may be twice as unpleasant later if they have to let an employee go who received an outstanding review the month before.
Copyright © 1991 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 2, No. 9, 11/91
First published on 11/01/1991