Cost Club Human Resources Concerns

Memorandum

To: Pat Poulton

From: Beverly Mahone

Date: April 28, 2014

Subject: Cost Club Human Resources Concerns

This memo is in response to several emails forwarded to me concerning potential HR issues within Cost Club. The concerns of discharges at the Anderson Cost Club store, Regional CEO's question about reducing employee costs, safety manager's concern about injury and damages, and resolving disagreements that arise in employment have been addressed and below are an outline of the potential risk and suggestions to minimize future risk for each concern. This memo also provides a brief summary of the important Employment Law concepts that would relate to the selection.

Message 1: Discharges at the Anderson Cost Club store

If the Anderson Cost Club store is located in an at-will state the employer can discharge an employee, or an employee can terminate his or her employment without cause unless there is a contract (Bennett-Alexander & Hartman, 2007). Documenting the employee's history leading to the termination will help to protect the company. Discharging an employee without reason can be harmful to any organization. Some of the reasons an employee can sue a company for wrongful discharge are constructive, retaliatory, other tort liability, military leave, or constitutional protections. Another reason an employee can sue a company for wrongful discharge is by the company discharging an employee because of discrimination. Title VII of the Civil Rights Act of 1964 states that it is unlawful for an employer to refuse to hire or to discharge an individual based on their race, color, religion, sex, or national origin (Bennett-Alexander & Hartman, 2007). In this case, it appears that the General Manager did have a valid reason for terminating the two employees. However, the manager must provide a detailed explanation to the corporate office on his decision to terminate the two selected employees. For future references, documentation before termination, and an explanation of the decision to terminate an employee must be given to protecting the company from any possible liabilities.

Message 2: Regional CEO's question about reducing employee costs

The Chief Executive Officer (CEO) is researching ways to reduce employee cost through hiring independent contractors and temporary employees. To accomplish this goal we must first look at what type of contract was signed during orientation. In the event that there was no contract signed Cost Club can follow the steps of the Worker Adjustment and Retraining Notification (Warn). If Cost Club is planning to displace more than 50 employees the WARN should be given 60 days in advance. Cost Club must not breech any contracts and be acting in good faith in order to prevent any legal action from being taken.

Although it is not illegal to hire temporary employees or independent contractors the company must ensure there are no misconceptions regarding the employment relationship. A few measures the Cost Club must take are to ensure a written document between Cost Club and the independent contractor must be signed. The document must describe the nature of the position, type of relationship, any compensation, duration of the job, whether it is an at-will position, and the period of time for the job.

There is a difference between temporary workers, independent contractors, and regular employees. Temporary workers are hired through a third party staffing agency and receive benefits through the staffing agency. There are no job stability for temporary employees and they can be terminated at any time. Contractors do not receive benefits, are not reimbursed for expenses, and are responsible for paying their own taxes. Temporary employees and independent contractors can provide Cost Club with additional support and not incur the cost of regular employees. Because there is no vested interest in these employees, Cost Club does not have the added