From the November 2001 issue of Entrepreneur

Unlimited Liability

Pray that an employee doesn't drag you into court for a discrimination lawsuit. Should you lose, the recent Supreme Court ruling in Pollard v. E.I. Dupont means you'll be paying more.

In the case, an E.I. Dupont employee sued the company for discrimination after it fired her. She had refused to rejoin the company after taking medical leave for psychological help after suffering sexual harassment on the job. The jury awarded her the legal maximum amount of compensation for lost wages: $300,000. Pollard's attorneys argued that the cap on lost wages did not cover "front pay"-income lost from the time she didn't rejoin Dupont until she found a comparable job. The Supreme Court agreed with Pollard.

"This case sends an unfortunate message to employees that the sky's the limit," says Manesh K. Rath, an employment law attorney at Keller and Heckman LLP in Washington, DC. Although he maintains aggrieved employees won't receive much extra compensation, you still need a thorough anti-discrimination policy. You won't pay front pay, after all, if you don't get sued upfront.

Fond Farewells

Uneasiness can paralyze your remaining staff after a layoff. Experts recommend the following to rally the troops and move on.

Respect the doomed. Be compassionate with those you ax, and don't speak ill of them afterward, says Richard C. Whiteley, author of Love the Work You're With (Henry Holt). Other employees will gauge you by how you treated their former colleagues-and question how you feel about them if you trash-talk others.

Be frank. Explain why the company ran into difficulties, says Dennis LaRosee, senior vice president of Praendex Inc., which provides employee behavioral testing. "If there's a dirty veil to hide a mistake that was made, these people will see through it," he says.

Paint your vision. "People need a track to the future," says Charles H. Bishop Jr., author of Making Change Happen One Person at a Time (Amacom). "What management has done [with a layoff] is interrupt it." Now you must reveal a new vision that addresses the problems that put your firm in its current state.

Feel their pain. After a group meeting announcing the layoff, says Whiteley, meet with individuals so they can voice concerns that they might not express in front of the group.

Build on accomplishments. "What's important in a recovery program is early wins," says Whiteley. Meeting tough milestones in the first weeks after the layoff gives people a sense of accomplishment again.


Business writer Chris Sandlund (csandlund@entrepreneur.com) works out of Cold Spring, New York.

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