Friday, February 05, 2010

Fired or Laid Off?

 By Mike Dorf

During the last economic contraction--after the bursting of the dot-com bubble at the turn of the century--a number of prominent law firms appeared to be using the following stratagem: Instead of laying off associates, they were letting people go for ostensibly poor performance.  To the outside world this looked better than layoffs because it did not communicate that business had slowed down, but to the young lawyers who were let go, it was cruel.  On top of the loss of a job, they were saddled with the stigma of having been fired for performing badly, making it that much harder to get a new job.  Strictly speaking, the dismissed lawyers perhaps could have sued the firms for defamation if and when they told prospective employers that the former lawyers had performed badly, but suing a former employer is almost never in the interest of someone trying to find a new employer.  And so the young lawyers simply had to take the hit.

In the current economic downturn, most law firms had to let go of so many lawyers that they simply could not get away with the gambit just described.  If a 350-lawyer firm dismisses 15 lawyers in a year, it can plausibly claim to be cutting poor performers.  Not so if it sacks 50.

Nonetheless, I have what I regard as pretty strong anecdotal evidence (from outside Cornell) that the practice at issue has migrated to tenure decisions in university departments in the arts and sciences around the country.  Here's a typical example: A large history department that tenured 3 of 4 tenure-track internal candidates in 2005 tenured 1 of 4 such candidates in 2009.  Because the total number of people at issue in any given year is small, the department can plausibly claim that the class of 2009 simply happened to be weak, but I've seen or heard of this happening in enough places that it is very hard not to understand these decisions as being strongly influenced by resource constraints.

The impact on the people denied tenure closely parallels the impact on the dismissed lawyers.  Being denied tenure "on the merits" makes it especially difficult to find a tenured or tenure-track position at a remotely comparable institution.  Nor are dismissed academics very likely to sue for defamation, both because of the harmful reputational effects and because it's very difficult to prove that a tenure denial was illicit.

Does this mean that nothing can be done?  Perhaps not.  At the very least, institutions--whether law firms, universities, or other employers--that disguise layoffs as performance-based firings can and should be exposed, and thus shamed into taking the reputational hit themselves.  Some enterprising do-gooder could start a website--"laidoffnotfired.org" is an available domain name--dedicated to collecting stories.

Former workers of the world unite.  You have nothing to lose anymore anyway!