A Retirement Change of Mind–Tip of the Week

A month ago, one of your employees told you he was retiring at the end of the year.  It wasn’t a surprise.  He’d mentioned the possibility before.  There are emails back and forth between you and the employee confirming his decision.  You’ve begun the “retirement paperwork.”  You’re interviewing for a replacement.  A retirement party is even in the works.  Today, he tells you he’s changed his mind.

A lot has happened in the last month.  The employee’s 401(k) has taken a hit.  One of his kids has been laid off.  The other’s hours have been cut.  Your employee is scared.  He’s not sure he has enough to retire.  He may have to help his children and their families.  His spouse, who retired some time ago, is now looking for part-time work.

What do you do?  If this hasn’t happened to you yet, what will you do?

There’s no magic answer.  The employee is undoubtedly in the protected age group, so there’s the possibility of an age discrimination case if you don’t honor his change of mind.  No guarantees, but you’d probably win it.  The morale of other employees may be adversely affected if you say no, and morale is already bad enough.  On the other hand, morale may be adversely affected if you keep the employee and he no longer pulls his weight because he wants to be retired.  You should also check your written policies to see if they cover this kind of situation. 

While a discussion about this scenario could run on and on, let me oversimplify by saying you need to ask and answer two questions.  What have you done in the past?  If you have consistently insisted that an employee’s announced retirement be implemented, you need to stick with that course of action.  If you’ve never had this kind of situation before, then the second question arises.  What kind of precedent will this set?  Just because you let one person change his mind doesn’t mean that you’re stuck with that decision forevermore, but it could be the beginning of a practice that may come back to haunt you.

Unless you’re bound by prior practices or a written policy, it’s your decision.  Before you make it, get the input of the management team; do your best to consider all the possible consequences; and obtain legal advice.  Discuss with your lawyer all the details of the situation.  Ask whether there’s a state law that could impact your decision.  Discuss the possible application of federal law under the specific circumstances you’re dealing with.  Relying on the results of your internal discussions, the legal advice you’ve received, and the judgment you’ve developed as a result of dealing with even more difficult decisions, make the call.  Then move to your next problem.

(Also, check out Dan Schwartz for the five laws/issues you should consider given our current economic situation.  And check out Molly DiBianca for a detailed discussion of one of those laws–WARN.)

1. 

   Dan Schwartz says:

   October 6, 2008 at 2:23 pm

   Thanks for the “shout out”. Your post brings up a great point. I suspect we’re going to see a lot more of these types of issues in the next few weeks.
2. 

   John Phillips says:

   October 6, 2008 at 7:30 pm

   No doubt about it. I think we’re all in for a wild ride.