Assume that you are the senior HR executive in your company. For years, your firm had relatively little diversity. The 1,000-member workforce was almost exclusively white and male. In recent years, however, you have succeeded in increasing diversity substantially. Almost one-third of your employees are now female, while more than 40 percent are Hispanic or African American.

Your firm has recently had some unfortunate financial setbacks. You feel that you have no choice but to lay off about 300 employees for a period of at least six months. If everything goes well, you also expect to be able to rehire them at the end of the six-month period.

You are currently puzzling over what criteria to use in selecting people for layoffs. If you use strict seniority, women and ethnic minorities will bear the brunt of the layoffs because they are almost all among the newest employees in the firm. If you use strict performance, however, your older and more senior (and predominately white male) workers will bear the brunt because your newer employees have the most current training and job skills. You also wonder what role loyalty should play because many of your older workers could have left for higher-paying jobs a few years ago but chose to stay.

Anwer these questions:

1. What HR laws and regulations apply to this situation. Describe the laws that you think are critical in decision making here. What could happen to a company that doesn't abide by these laws and regulations? Can you find any real life stories of legal actions taken against companies for violating these HR issues?

2. What do you think initially is the best course of action?

3. Who deserves more protection from the layoffs? Who deserves the least protection? Why?