Friday, March 06, 2009

Pre-Emptive Layoffs

An alert reader sent me the link to this article from the Springfield (Mass.) Republican. Apparently, the University of Massachusetts is sending out layoff notices to 60 faculty now, just in case it needs to actually go through with layoffs this Fall. If the stimulus package delivers enough, it will call some fraction of the 60 back.

On the face of it, this is insanity. To say “you're fired,” only to follow it weeks later with “never mind,” pretty much guarantees a serious morale issue. The message it sends to the affected employee is “you are on the absolute bottom of the totem pole, and your job is hanging by a thread.” There's a tremendous difference between “we may need to do some layoffs” and “you, personally, will be laid off unless we get more money.” It inflicts terrible stress on people for whom it may ultimately prove to have been unnecessary. My fearless prediction: if most of these folks do come back, I'd expect most of them to leave voluntarily over the next few years.

But the article suggests that this may not just be managerial tone-deafness. The key quote:

The university is contractually obligated to notify these lecturers, said UMass spokesman Edward F. Blaguszewski. The contract of the first group required longer notification.

Anyone who has managed in a unionized setting knows what this means.

Contracts usually contain notification deadlines for retrenchments or layoffs. Failure to comply with those deadlines is grievable, and may ultimately result in forced payouts. In other words, if the university decides in May or June that it doesn't want someone back in September, it may be too late. The penalty for late notification can be drastic, but there's no penalty for an early 'false positive.' So the fiscally rational thing to do, perversely enough, is to send out notices to as many as your worst-case scenario suggests you'd need to, and then to call back the ones you can.

The irony, of course, is that this is a side effect of a contract provision usually favored by the union. A workers' protection clause winds up generating unnecessary pink slips.

At my campus, we're facing a variation on this. It isn't yet clear how the federal stimulus money will affect next year's budget, but we're coming up on some hard contractual deadlines. Our state money has been cut severely, but some fraction of that cut may – or may not – be restored for July. People on campus are nervous and jumpy, and looking for answers, but “I don't know” is the truth. Budgets are always based on assumptions – if we assume two percent enrollment growth, then we have x dollars – but the range of plausible assumptions this year is unusually wide. We keep waiting for the dust to settle, hoping to gain some clarity, but the contractual deadlines don't give us much wiggle room.

It would be easy to bash the University of Massachusetts for this, and there may be other valid reasons to do that. But this is a (perversely) rational response to an insane situation. For everybody's sake, I hope we can get some clarity soon. Until then, I expect to see more stories like this.