A few years ago, at the beginning of the financial crisis, there was this rumor that traveled from mouth to mouth about some company that did some layoffs.

The story says the company's management announced an important communicate to all the employees and all employees needed to gather in the building's parking lot for this announcement.

When all people were there the announcement was made: some people were laid off. If you tried to return to the building and your access badge didn't work any more then you were laid off; if it worked, you were still an employee.

I can't find any reference of this anywhere. Did this actually happen?

  • 2
    This claim is unsubstantiated. – Bigbio2002 Feb 20 '14 at 23:12
  • @Bigbio2002: If you mean there is no reference to provide notability, I agree, but by the time I came across it, there was an answer that demonstrated notability, so there was no need to ask the OP to provide it. – Oddthinking Feb 21 '14 at 2:49
  • without formal termination letter you're not laid off... And employees will generally have to do the rounds of HR, facilities management, etc. etc. in order to hand in company property like cellphones, laptops, company cars... – jwenting Feb 21 '14 at 7:51
  • As non-mass-lay-offs (aka: firing a single individual) this was common in my company in Germany. If this question only addresses mass lay-offs, the question title should reflect this. – npst Feb 21 '14 at 11:51
  • I feel like I read a story like this in relation to a video game company that just kind of disbanded overnight. But in that case the story was not that some people were laid off, it was that the company went out of business without telling the employees and no one knew until they showed up and couldn't get in. – Andrew Whatever Nov 11 '15 at 22:12

I could not find any evidence that this ever happened as you described it, and Snopes concurs. In fact, mass employee layoffs without advanced warning is (under almost all circumstances) illegal in the United States. "Advanced warning" just means that the entire workforce needs to be warned that a mass layoff is going to happen at least 60 days before the first employee is notified that they specifically have been chosen to be terminated. So, any company that pulled such a stunt would almost certainly be breaking the law, and would likely have received a lot of negative press for it. Since I could find no such record in the press, I think it's relatively safe to say that it is just a legend, at least within the United States. Proving whether or not it happened internationally may be impossible unless there is a high profile incident that somehow eluded our collective Google-fu.

I will say that for large layoffs that are below the legal definition of a "mass layoff," using this technique would be legal in the US, and therefore might be plausible. However, I would think that such a stunt would cause a lot of negative press for the employer. The same sort of effect could be achieved by simply packing up all of the terminated employees' belongings over a weekend and then individually denying them access to the facility on Monday morning, which avoids the spectacle of having everyone laid off in a group.

There have been a couple reported incidents both in the UK and in the USA where the entire workforce was terminated using the "fire drill" method. In all such cases, however, it was due to the entire company ceasing business, so all employees were terminated.

Addition (2014-02-21): It turns out that there has been an international treaty (currently ratified by 35 countries) in effect since 1985, called the Termination of Employment Convention, that has very similar restrictions to the US law I mentioned above.

Article 11: A worker whose employment is to be terminated shall be entitled to a reasonable period of notice or compensation in lieu thereof…

As was mentioned in the comments, the employer could always immediately revoke access to the employee(s) and then provide some severance compensation, but unless the employees were being terminated for negligence (which sounds not to be the case in the supposed firedrill scenario), then the employer would likely want to have the employees work for that period anyway.

Article 13 Paragraph 1: When the employer contemplates terminations for reasons of an economic, technological, structural or similar nature, the employer shall: (a) provide the workers' representatives concerned in good time with relevant information including the reasons for the terminations contemplated, the number and categories of workers likely to be affected and the period over which the terminations are intended to be carried out; (b) give, in accordance with national law and practice, the workers' representatives concerned, as early as possible, an opportunity for consultation on measures to be taken to avert or to minimise the terminations and measures to mitigate the adverse effects of any terminations on the workers concerned such as finding alternative employment.

So, in all 35 countries that ratified that treaty, the employer would have had to give the employees advanced notice of the layoffs.

  • What about in other countries? Has this happened outside of the United States? – rjzii Feb 20 '14 at 19:21
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    Wouldn't the Worker Adjustment and Retraining Notification Act be satisfied by paying the workers for an additional 60 days? Some employers must be careful not to allow disgruntled employees access to sensitive data, machinery and security systems - hence the "escorted off-the-premises" trope. – Oddthinking Feb 20 '14 at 22:01
  • @ESultanik: Oddthinking is most probably right here. Even if it's not common, I don't see why laid off employees should not be immediately denied access to their office. It's a quite common practice for employees in sensitive positions here in Germany. The circumstances do not match the question, but last year all photographers working for The Chicago Sun-Times were laid off in a similar fashion: poynter.org/latest-news/top-stories/215016/… – Tor-Einar Jarnbjo Feb 20 '14 at 23:32
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    @Oddthinking The way I interpret the law, a company must notify its employees that a mass layoff is going to occur at least 60 days prior to any employee being notified that they specifically are being terminated. – ESultanik Feb 21 '14 at 1:42
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    @Tor-EinarJarnbjo they would have to have an opportunity to collect personal belongings, hand in company property in their posession, etc. etc.. That might be bone under escort, but I've never left a company in any way where I wasn't allowed to roam the building on my own up to the very moment I turned in my badge and left for the last time (usually handing it in at the reception desk). Any security requirement that prevents people from access to certain areas would have access badges that can be programmed for specific doors only. – jwenting Feb 21 '14 at 12:27

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