Best Practices for Avoiding Age Discrimination Lawsuits and Claims in RIFs
by Jackson Lewis
Since the start of the recession in December 2007, 5.1 million jobs
have been lost, according to March 2009 figures from the U.S.
Department of Labor's Bureau of Labor Statistics. Almost two-thirds
(3.3 million) of losses occurred November 2008 through March 2009.
Additionally, figures from the federal Equal Employment Opportunity
Commission (EEOC) show that age-related discrimination allegations by
employees are at a record high, vaulting 29% to 24,582 charges filed in
the year ending September 30, 2008, up from 19,103 in 2007. While EEOC
figures show overall employment discrimination complaints are also at a
high (up 15% to 95,402 complaints), age-related complaints had the most
remarkable increase.
That this spike coincides with employers announcing widespread layoffs
and reductions-in-force (RIFs) is not surprising. Companies recently
grabbing headlines as being targets of age-related discrimination
complaints include the Lawrence Livermore National Laboratory in
California, where more than 98 laid-off employees alleged they were
targeted in a mass layoff because of age; 3M Company, where more than
4,900 employees filed an age discrimination lawsuit; and Dell Inc.,
where four former human resources employees filed a $500 million age
discrimination lawsuit.
In a poor economy such as this, employers considering
workforce restructuring should weigh the risks of incurring employee
lawsuits, agency charges, and other potential liability.
Best Practices to Consider
Among the tools available for employers to avoid age-related
claims, many comprise a best practices approach " both in terms of
planning for a reduction-in-force and for selecting employees during a
layoff " that include:
- Review for Possible Disparate Impact. Prior to implementation of a
plan for a RIF, initial selection decisions should be evaluated to see
if there will be any disproportionate effect on minorities, women, or
workers 40 or older. If there will be, the employer should evaluate
whether the selection of these individuals can be justified by business
necessity, or in the case of older workers, by reasonable factors other
than age (RFOTA). If justification is lacking, alternative selections
of individuals who are outside the protected classifications should be
considered. It is also important to determine if an employee slated for
termination has any basis for alleging retaliation.
- Use RFOTAs and Statistical Analysis to Spot Potential Bias in
Selections for Layoff. Employers conducting group termination programs
are at significant risk of incurring discrimination claims based on
age. In 2005, the U.S. Supreme Court made clear that age discrimination
claims under the Age Discrimination in Employment Act can be premised
on the theory of disparate impact, that is, that facially neutral
factors used in the selection process resulted in termination of a
disproportionately high number of older workers. Smith v. City of
Jackson, 544 U.S. 228 (2005). And, on June 19, 2008, the Court ruled in
Meacham v. Knolls Atomic Power Laboratory that in defending ADEA
claims, employers has the burden of proving that an employment practice
with a disparate impact on older workers cannot give rise to
age-discrimination liability because it is "based on reasonable factors
other than age."li>
Jackson Lewis attorneys have the experience and resources to
provide effective advice and counsel on employment, benefits, and labor
relations issues arising before, during, and after a reduction in
force, a layoff, or a reorganization.
For more tips on working smarter during the recession and on avoiding
age-related discrimination claims, please see the First Quarter 2009
issue of Preventive Strategies, available at
http://www.jacksonlewis.com/legalupdates/newsletters/issues.cfm?nlid=1, and contact the Jackson Lewis attorney with whom you regularly work.