SCENARIO 1: ALDO PHARMACEUTICAL COMPANY (“APC”) Your neighbor, Paul Ryan, was bo
ID: 1129593 • Letter: S
Question
SCENARIO 1: ALDO PHARMACEUTICAL COMPANY (“APC”)
Your neighbor, Paul Ryan, was born in 1957; he turned 60 on his birthday last September. He has worked for Aldo Pharmaceutical Company (“APC”) as a “Computer Operations Technician” since 1985. Although the technology has changed somewhat over time, his company continued to use large mainframe servers that needed close daily supervision in case the system went down. In April 2017, he learned that that the rumors about new technology were true: the company had finally decided to move to current enterprise wide software that operates on workstations and laptops. To the extent that servers are required, the company is renting that space from Amazon in California. On or about July 14, 2017, the Computer Operator Technician’s position was eliminated. Life has been good; Paul had been earning roughly $74,000 per year ($36 an hour). He has six weeks’ vacation accrued and if he needs it, up to four weeks’ sick leave. Paul, whose daughter is now a college junior, was able to leverage these good working conditions so that he never missed her soccer games or concerts or plays. APC has a close relationship with the nearby community college where Paul has earned about 35 credits, majoring in general business administration. With the exception of one course in computer-aided design, Paul has not taken any technology courses.
Paul has excellent benefits, including a 401 (k) plan and a provision for health insurance after he retires. However, to keep his post-retirement health care benefits, Paul must work for APC until he is 62. (The value of these accrued premiums when Paul completes 10 years worth of payments, will be roughly $33,500. He can get the $35,000 out before he officially turns 62, but it is unlikely that he would then he able to purchase similar benefits for the same money. NOTE: Any employee among the Computer Technicians who was at least 52 years of age in 2017, has been participating in the “post retirement health insurance benefit.” Paul is well liked and regarded as a “leader” among the employees. Paul has organized and acted as Team Captain for Aldo Company Bike Teams for “the City to Shore MS Ride” over the past five years. Bilingual in English and Spanish, he often is recruited as a translator for problems between the warehouse and management employees. Paul is pretty upset about losing his old job. He and the five other APC computer technicians have been told that they can interview for four “help desk” positions as well as any other positions open at APC. Paul is attracted to the Help Desk job because he loves problem solving and he does not want to sit in a cubicle.
Paul’s former job had nothing to do with the world of PCs and distributive software. Paul feels comfortable with email and looking up the answers to his own questions on
the web. [Yet] his interview went well and he was offered one of the four Help Desk jobs. APC has stated that training will be provided, but he doesn’t think he is qualified
for the job. Paul feels anxious and doubtful at work for the first time in his life. He has expressed these concerns to his new manager, who has tried to reassure him he will
continue to receive training and a chance to succeed. The other employees on the “Computer Operator Team” were affected as outlined below. Four were hired as Help Desk Specialists, but two left the company. Paul Ryan and his remaining four employees are trying hard to contribute to the team.
Name Birth Date Race/ Hire Date Current Current Hourly Rate
Sex Position (Old Rate)
1.Adams, Bert 05/04/58 W/M 06/30/88 Help Desk I $26/38
2.Chan, Lee 08/25/60 A/F 11/12/90 Help Desk I $24/37
3.Ryan, Paul 09/02/58 W/M 09/11/87 Help Desk I $26/36
4.Seiler. Rob 10/12/62 W/M 08/30/83 Help Desk I $26/37
5.Smith, Susan 12/09/53 B/W 03/01/84 (Resigned) $24/34
6.Vega, Joe 11/05/57 W/M 08/30/83 (Resigned) $27/41.
QUESTIONS:
1. When APC made the decision to eliminate the Computer Technician positions, what kind
of legal liability did that decision impose on the company? Please state which law(s) might apply
to this decision and the issue(s) that were created.
2. As you can see from the data about the team, most of the members took a big drop in their
hourly rates to move from “Computer Technician” to “Help Desk Specialist.” When an
employee takes a significant reduction in salary, even for a “good reason,” how can the
company try to keep those employees engaged? Is it possible? Why or why not?
3. Other employees in the company who have heard about the new Help Desk are likely to be
a bit confused: isn’t there a shortage of skilled IT workers? Even though the company probably
won’t publish everyone’s salaries and resumes, will the new Help Desk employees be
misunderstood or resented? What do they have to complain about?
4. Examine the salary and seniority data -- to what extent has APC put itself in potential legal
peril by eliminating the Computer Operator Technician job? Please describe any legal issues as
specifically as possible
5. What course of action should APC have taken from the beginning of this situation to
minimize harm to the company and to fix it?
Explanation / Answer
ANS.
The company is therefore liable for breach of contract to those who have one or two years left to be eligible for the plan. Forcing them to leave, will put them in a position of disadvantage. Again, since all such employees are old hands, the company might also be liable for discrimination based on age, and suddenly asking them to leave or compete for a low paying job.
Ans 2: Such employees may be trained for more productive roles in addition to their routine jobs according to their calibrate and experience. It is possible, because even the employee, in most such cases will be willing for this.
Ans 3: The employees may feel resented and may be considered as someone with less bargaining power. However the employee can soon overcome this attitude by continuous up gradation of his / her skills and taking new and challenging responsibilities and earn respect.
Ans 4: The possible legal troubles are breach of contract by forcing the employee to retire and bear loss in the benefits scheme, and discrimination on the basis of age.Another ground for legal issue is probable charge of mala fide intentions on the part of the company to make the employees lose the benefits by retiring them early.
Ans 5: Decisions like upgrade of systems can not be taken in a moment. The company should have planned it in a phased manner and given the employees fair amount of time to upgrade their skills to be eligible for other jobs in the company or elsewhere. They should ideally have been given training to take up other jobs in the company according to their qualifications and experience. This would have not only saved their jobs and benefits, but also prepared them mentally to plan suitable course of action, should they decide to leave.
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