Isn't it tempting to announce a layoff once in a while to get rid of problem employees all at once? No issues with individual performance improvement plans, no hassle with painstakingly documenting each case. Some employers take that shortcut at their own risk. These employers assume that if an employee accepts a severance package with a release agreement, there is nothing to worry about. Not so fast, determined the case of Hawks v. Ballantine Communications, Inc.
In Hawks that case, several employees were let go because of alleged downsizing. Employees accepted severance packages and signed a release of claims. Nevertheless, the company posted the same jobs and eventually hired younger employees to replace laid-off personnel almost immediately. The terminated employees then sued the company for age discrimination, and the court recognized that severance agreements could be unenforceable if they were fraudulently induced.