Cost Club Scenario

Cost Club

Atlanta Regional Office

100 Cost Club Blvd.

Atlanta, GA 30303

404-330-6190 - Office

Memorandum

TO: Esq., Manager

FROM: M. Williams, Assistant Manager Human Resources

DATE: Monday, March 14, 2011

RE: Response to Memo received March 8, 2011

Message I - RE: Discharges at Cost Club - Anderson

The question to be addressed: if the GM (General Manager) can discharge employees without cause.

Mr. Smith, GM - since the store is in facing financial and economic hardship during this recession, there aren't any repercussions from Federal or State Law. You terminated the employees under tenuous economic pressure.

While there are certain "at-will" conditions that the company has to be mindful of, this case is not an example. CC's Handbook clearly states under "Termination Policies" that, "if the company has to downsize, merge or relocate there may be a reduction is staff...."

Message II - Regional CEO want to reduce employee costs

The question to be addressed: will the law allow reduction in force through the use of temp's and contractors

Mr. Taylor, CEO - Your request to amend the staff at your location is here by granted. Under Termination Policies in the CC Handbook the employees understand that they are at risk and the terms of their "at-will" contract allows CC the right to adjust their relationship with our company. You might suggest to those that you want to terminate an alternative. Suggest this to them, that instead of a complete severance of the relationship, you could offer them part-time hours until the company's economic status is back in-the-black. Please let them know that they will have to sign a new contract with the new terms outlined.

This option may appease them just enough to overt the thought of legal action. Although CC is standing on solid ground, we do want to avoid any undo legal action. So please consider that fact that CC has put a lot of money into the cost of training these employees. They all have spotless records, with excellent performance reviews. These employees could continue to be an asset to the company as part-time associates. Plus, this will avert the cost of unemployment insurance we would have to pay if we fire these employees.

Message III - Safety Manager's concern bout injury and damages

The question to be addressed: is Cost Club (CC) vicariously responsible for the actions of its employees.

1. Springfield, KY - Employee, touching customer in direct violation of the CC Employee Handbook

Pat as the employee knows they were in the wrong and will have to suffer the consequences for their action.

For the employee to "slap a customer" is beyond reproach. There is nothing we can do for this employee at this point; re-training will not help, anger management may...but that is not our problem now. This employee must be terminated a.s.a.p. and the customer must be contacted by me personally. The next best thing we may do is a conference call with the customer...at your convenience. Without expressing any overt liability, we will feel out