Best Practices for Avoiding Age Discrimination Lawsuits and Claims in RIFs

 
Monday, June 1, 2009
 
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.
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