Monday, February 20, 2006


You're a manager in a company, and you're called into a meeting where you and other managers are told that layoffs will take place at the end of the month. A list is circulated with the names of employees to be laid off, including those in your department. You are all told not to inform anyone about the layoffs until two weeks later, when an announcement will be made to the entire company.

When you get back to your office, one of the employees you manage comes in and tells you that he's about to make a down payment on a house. He asks if you know of anything going on at the company that should make him reconsider. You know that his name is on the list of employees to be laid off.

Do you tell him?

Post your thoughts here by clicking on 'COMMENTS' below. Or send your comments to Please include your name and your hometown. Readers' comments may appear in an upcoming column.


Anonymous said...

My answer is yes, for two reasons.

First, an employee who loses his job faces not only financial
pressures, but a sudden lack of confidence and sudden emotional
stress. I consider it unconscionable that a manager would
add to the employee's stress levels (not to mention his financial
burden) by not advising the employee to forget about the down
payment. I understand what this employee
would face, and I would advise the manager against making
post-employment life more difficult than it has to be.

Second, the employees that remain under the manager may hear
about what the manager says to the employee prior to the layoff.
If the employees know that the manager knew what was to happen,
but lied to the laid-off employee, then the manager's credibility
is undermined.

That said, I would advise that the manager at least say to the
employee, "Yes, things are about to change at the company,
and you should not make a down payment on the house." If the
employee persists, I would tell him that there will be layoffs,
and ask the employee not to tell anyone else. But the right
thing, in this case, is to prefer honesty to undermining

Anonymous said...

I doubt that this scenario would happen, as people usually don't tell their bosses about their plans to purchase a house.

BUT-- if asked "do you know anything" the only truthful-- and therefor ethical --reply is "yes." No more needs be said.

~*~ Nancy ~*~ said...

Both my husband and I decided there would be a way to let the employee know that changes are coming without disclosing any other information.

Hubby went as far as saying that the manager should be held accountable if the employee was assured all is well and later lost everything.

Anonymous said...

"When you get back to your office, one of your employees you manage comes in and tells you that he's about to make a down payment on a house. He asks if you know of anything going on at the company tha should make him reconsider. You know that his name is on the list of employees to be laid off.
Do you tell him."

No you do not tell him directly, being a good corporate manager.

However you do recommend that he seriously reconsider his decision to purchase a house just now, in that the company in general is facing difficulties due to external circumstances and influences.


1) You have maintained the confidentiality that was requested of you by upper management, in order to maintain some stability within the organization prior to the layoffs.

2) You will have earned the medium to long term respect of an employee and person, that some time into the future may be recalled or be needed in another business venture that you knew of.

3) You preserve the self esteem of the employee, and will have gained the respect of the employee over the next 2 weeks and several months or years that will follow.

Or at least that's the way we prefer to do it.

In corporate America, home of Enron, and MCI and other savage corporations, you don't give a damn, tell the employee nothing is wrong, everthing is fine, lie to his face, then in 2 weeks lay him off, and hand him the empty banker's box so he can clean out his stuff, as he wipes the tears from his face, and don't even offer him a tissue as he leaves. God Bless Corporate America.

Dan Steinhaur P. Eng.
Stein Industries Inc.
19 Artisans Cresent
London, Ontario
N5V 5E9

Anonymous said...

My name is Brent Waechter and I live in Cypress, CA.

The answer is "NO," You don't tell the person about to make a down payment about the list.

My response to the employee would be, "Whatever I may know or not know is not a relevant part of your decision. Purchasing a home is a big decision and it needs to be made by you and your family, not based on whatever you think about whatever it is I might say or not say". I would then resist any urging to discuss the matter further. I would further size up the circumstances. Depending on the gravity of the situation the company is in, the strength of this individual employee being affected and the future work I expect in my department (among other things) I may want to build a case to keep this person on board. That is not necessarily driven by the down-payment question, but is something I would likely have considered anyway. After all, everyone on the list will suffer personally from the action. The difference is that this person works for me and I do have some responsibility to support them and their work with my superiors.

There are several things to consider here.

1: The people that gave you the information about the list trust you to keep it to yourself. There is no way that you can share this with the one person and expect that person to keep it to themselves. Telling them will be the same as telling everyone there is a list.
2: These types of lists have a way of changing before the actual announcement is made. It is entirely possible that this person may be on the list today and off the list tomorrow. Imagine the chaos you will have created for what turned out to be nothing.
3: The individual making a down payment can likely get his entire down payment back if the layoffs take place in just two weeks as outlined. Most escrows take far longer than two weeks. The person making the down payment hasn't even started escrow yet. A major change in the financial picture of the buyer, like losing a job, will cause the deal to fall through. While there may be some non-refundable fees, there is likely to be limited long-term financial damage to the individual caused by the down payment. The bigger problem is the loss of a job.
4: You could lose your job too.

Anonymous said...

If were the one told not to tell for 2 weeks and my employee came to me with buying a house ,first i would go to THE PERSON that said that to me and tell them the probleum If they said dont tell i would then go to the employee and ask them to wait for the 2 weeks any way and try not to diclose to them the reason .if that didnt work would tell them what was going on.

John Dricker

Anonymous said...

You are forbidden to disclose the fact of the employee's termination, but you might forestall his investment by offering him help in getting a better deal on the house. If you do choose this option it is important to actually invest some time in the effort. Since he came to you voluntarily for advise you are not betraying his trust. You may actually find that you can provide some information on loan options or mortgage rates that would benefit him. If this causes a delay of a couple of weeks to gather the information you will have saved him from some of the financial hardship he will face when his job ends.
Charles Mitchell
Garden Grove, CA

Anonymous said...

I read your article: "Accurate resume is the only way to go" in the Orange County Register on 2/20/06. Towards the end of the article, you pose an ethical question regarding a manager that has information about a list of people that will be informed about layoffs in 2 weeks. You ask the readers' opinion on whether this manager should inform one of his staff who is about to put a down payment for a house and asks him if he knows anything that should make him reconsider.

It did not take me more than 2 seconds to deliberate. If I would be faced with this conflict, I would definitely tell my staff about the upcoming "secret" news, and ask him to keep it confidential.

As Corey, Corey & Callahan, 2002, write in Issues and Ethics in the Helping Professions, " of ethics are not intended to be a blueprint that remove all need for the use of judgement and ethical reasoning..." Accordingly, each person needs to use their own moral compass while making a decision, personally and professionally. When it comes to "the right thing to do", there is no set of rules; each person might find a different way to resolve conflict.

Having said this, in my personal judgement, I rather help this employee and run the slight risk of jeopardizing my job - why would I want to work for a company that would not stand for humanity anyway? than be a "good girl" in the company's eyes, and allow another human being fall into financial ruin.

And this is just my humble opinion...
Sula Goldenberg
Garden Grove, CA
Marriage and Family Therapist

Anonymous said...

In response to the issue of how to handle the proper notification of a layoff here are some of my thoughts:

1. I would be somewhat put off in the circumstances provided in the article that as a manager I was not consulted as to which of my direct reports would be subject to a layoff. However, for the purpose of my comments I will assume this to be the case.

2. If asked by my direct report concerning his job status I would tell him that he is going to be subject to a layoff in two weeks. My reasoning, I respect and will implement business decisions that my employer directs me to handle. However, I think the employer has an obligation to level with their employees so that an employee can make an informed business decision concerning their future. Too many companies, "want their cake and eat it too." The argument put forth by some that by announcing a layoff will cause the "good workers" to leave just doesn't wash with me. My response, if they are a "good worker" they already know what's up and are preparing to leave anyway. The company would be better served to level with their employees at all times.

3. In this same instance, if this direct report did not ask me would I tell him? Probably not. My reasoning in this case would be that he probably already knows. If an employer is planning a layoff in the manner described, than more than likely a good many of the employees would suspect that something is coming down and would not be surprised when it occurs. Also, I like to think my direct report would not have to ask since I would have already provided information concerning the status of operations through my regular staff meetings.

4. Even if my direct report was surprised by the layoff I would expect him to be able to handle the layoff because as part of my management routine I am always preparing my direct reports to make "business decisions" based on what's best for them. I accomplish this by sharing with them the good and bad news through my regular meetings plus encourage them to better themselves.


Michael Groome
Irvine, CA

Anonymous said...

Subject: When you get back to your office, one of the employees you manage tells you he's about to make a down payment on a house. He asks if you know anything that should make him reconsider. You know he's on the list.

Tell him that you have scheduled a meeting with all of your employees in an hour or the next day early and that you will be informing everyone at that time.

Then hold the meeting and inform all Your employees that they should not make any major decisions, Financially or personal in the next week or so. If they ask if they are on the list, tell them, all of the effected employees will be notified at the same time.

My experience is that when you are laying off employees, it's best to give them a couple weeks pay and let them leave so they do not disturb the other employees. You may have to give them 60 days notice, depending what regulation the company is under.

Layoffs are like a death sentence. Treat it with passion.

A. Jacques, Santa Ana, CA.

Anonymous said...

I wouldn't tell him he was on the list, but I would tell him it wasn't a good time to invest in a house.

Anonymous said...

Mr. Seglin: Concerning the manager's responsibility to his employee who is about to be terminated, but is planning to make a down payment on a house--the manager should inform his superior of the situation, but should not tell his employee of the pending termination. Also, in California, real estate contracts provide that the purchaser must qualify for a mortgage loan and that the transaction is contingent upon that qualification. If a purchaser loses his job, he usually does not qualify for the mortgage loan. Therefore, the down payment would be refundable.

Hank Walling
Placentia, CA

The Orange County Register is where I read and enjoy your Ethics column.

Anonymous said...

"Making the List" poses a true life problem that many managers face every January. Employees are preparing for the holiday season, purchasing "big ticket" items, going on vacation, spending their savings, only to find themselves unemployed by the middle of January. Corporate knows full well there are going to be layoffs in January, but refuse to tell their rank and file. Those laid off could have still enjoyed the holidays, but probably would have put off the trips, purchasing those big ticket items, or spending large portions of their savings accounts. Ethical hardly, the reality of business is layoffs will start a new year, a new quarter, by shedding employees, and their benefits.

Todd M. Brklacich
Murray, Utah