Question

Identify 15-20 potential legal issues presented by the following fact pattern and provide a short 

analysis for each.

You are the Vice President of Human Resources for Beaver Stadium Fertilizer Co. (BSF), the largest manufacturer and distributer of fertilizer for athletic fields in the country with over 40% of the market share. The CEO of BSF is Amy Dietz. Ms. Dietz is a dynamic woman with a youthful appearance and more energy than a new puppy.Ms. Dietz moonlights as a professor in Penn State’s HRER program.

In recent years, BSF hired a number of graduates from the HRER program. These recent hires have excelled at BSF, receiving a disproportionate amount of recognition and extremely high performance reviews. This has become a source of tension for some of the long-term employees at BSF, who believe that there is no substitute for experience in the athletic field fertilizer business and that Ms. Dietz has a bias in favor of younger employees.

The athletic field fertilizer industry has been ravaged by the widespread conversion of grass athletic fields to prescription turf. Fortunately for BSF, over a year ago, several hires from the HRER program predicted a shift from grass to prescription turf. Ms. Dietz invested significant resources of BSF to fund the Beaver Stadium Fake Grass Co. (BSFGC), a start-up company that manufactures synthetic grass. Synthetic grass has a significantly higher profit margin than athletic field fertilizer. Although BSFGC is run by Doug Allen, everyone in the “business” knows that Ms. Dietz is calling the shots. BSFGC is a non-union company that currently employs 50 people.

Based on a suggestion by another recent hire with a JD/Master of Science in Human Resources and Employment Relations, and out of an abundance of caution that the industrious graduates of the HRER program do not take what they learned at BSF and go out on their own to compete against the company, as a condition of their continued employment with BSF, Ms. Dietz required all non-union employees to execute an agreement prohibiting solicitation of BSF clients during employment with BSF and for a period of 3 years thereafter.

Roughly one month ago, BSF employed 130 people, including 40 (30 full-time and 10 part-time) employees at its administrative offices in in State College, Pennsylvania and 90 (80 full-time and 10 part-time) at its manufacturing plant in Bellefonte, Pennsylvania. General laborers at the Bellefonte facility are represented by the Teamsters Local 8. Paul Whitehead is the President of the Teamsters Local 8.

As a result of declining business conditions, BSF has been forced to make reductions. In an effort to control labor costs, 30 days ago, Ms. Dietz directed you to eliminate all part-time positions, including the part-time laborers at the Bellefonte facility. One of the reductions from the sales and administrative office was Paul Clark, age 50, a sales consultant and recent graduate of the HRER program with extensive knowledge regarding Internet sales.

Pursuant to BSF’s severance policy, employees are eligible for one week of severance pay for all years worked for BSF in exchange for their execution of a release and waiver of all claims against BSF. At a recent SHRM conference, you picked up a short-form sample severance agreement which reportedly complies with the ADEA as amended by the OWBPA. Pursuant to the agreement:

• Employees over the age of 40 are given 45 days within which to consider the agreement and 7 days within which to revoke the agreement after it is executed;
• employees acknowledge, in writing, that they were given the opportunity to consult with an attorney;
• employees release BSF from any and all claims of whatever kind and whatever nature from the beginning of time until the date the agreement is executed;
• employees waive any right to file a lawsuit or administrative charge against BFS; and
• the separation agreement supersedes all prior agreements and understandings between the parties.

Out of respect for the employees who will be losing their positions as a result of this workplace reduction, Ms. Dietz cautioned you not to release the names of the individuals impacted by the reductions or to provide anyone with any information that could potentially be used to identify the individuals selected for reduction.

Within three days of this initial reduction, the National Football League announced that all franchises would be required to install prescription turf by 2014. The next day, Ms. Dietz directed you to lay off five full-time employees at BSF’s sales and administrative office and 41 full-time employees at its manufacturing facility. Ms. Dietz directed you to lay off the non-union employees with the lowest scores on last year’s performance evaluation. And, Ms. Dietz directed you to follow the collective bargaining agreement in selecting unionized employees for layoff.

Following notice of these reductions, Mr. Whitehead asked you for documents demonstrating the financial condition of the company and the composition of BSF’s client base, including the percentage of sales attributable to each client. Pursuant to Ms. Dietz’ instruction, you denied Mr. Whitehead’s request, claiming that the information sought by the Union was confidential and proprietary.

Yesterday, Coach James Franklin announced that Penn State was considering a conversion from grass to prescription turf and that a final decision would be made within 14 days. Penn State is BSF’s largest client, comprising roughly half of BSF’s remaining orders. If Penn State converts to prescription turf, BSFGC will double its workforce in anticipation of increased orders. On the other hand, if Penn State converts to prescription turf, BSF will be forced to close its doors. If this were to occur, BSF would liquidate its assets and lay off its 64 remaining employees, including its Vice President of Human Resources

Ms. Dietz directed you not to discuss the potential closure with anyone, as mention of potential closure would result in loss of orders from BSF’s remaining clients.

Shortly after the announcement, Mr. Clark accepted a job with Dr. Turf, the leading manufacturer of artificial turf. Mr. Clark quickly becomes Dr. Turf’s leading salesperson, and reportedly is in talks with Penn State to supply all of the school’s artificial turf needs. Ms. Dietz directs you to enforce the non-solicitation agreement against Mr. Clark.

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