We just lost one of our biggest customers and have decided we need to lay off several employees from multiple departments. It turns out that all of the selected employees are over 40. Do we face potential liability?
Maybe. At first glance, it appears that the layoff may be targeting employees who belong to a protected category under the federal Age Discrimination in Employment Act (ADEA): age 40 and over. This doesn’t necessarily mean that the company’s decision is motivated by discrimination, but the outcome does invite closer scrutiny.
Identify Objective Causes of Termination
First, look at the process. You should be able to identify the specific factors you applied to identify those employees subject to layoff. These factors should be objective to the extent possible, consistently applied, and supported by documentation. For example, factors such as seniority, skill set, and past performance are generally provable.
Assess Company Age Bias
Next, the company should look in the mirror, so to speak. Identify whether there is any evidence of conduct on the part of management that supports a claim that employment decisions are motivated by age bias. Let’s say that Ed, the Sales Manager, made a comment six months ago during a meeting that he can’t believe how quickly “the millennials” are catching on to the new software. Even if Ed didn’t participate in the layoff process, his comment can be used to suggest that the company favors younger employees. At the time, Ed’s comment seemed harmless and therefore went unaddressed, maybe even unnoticed by most. A 50-year old employee being laid off now sees it as evidence of discrimination.
Be Proactive and Conduct Full Risk Assessments
Impending layoff or not, employers must address isolated comments or conduct that could be viewed as discriminatory. In the same scenario, the company should be able to show that it offered additional training and support to any employees who were having trouble with the new software, in any age group. This avoids the claim that certain employees were provided with a greater opportunity to succeed and advance. Layoffs are unpleasant and the company may want to get it over with as quickly as possible. However, failing to use a fair, consistent process and conduct a full risk assessment may prove to be far more unpleasant in the long run.
For more resources, see our Legal Guide, “Downsizing and Layoff Checklist” (6030) and Model Forms, “Downsizing Evaluation” (3331) and “Layoff and Recall Log” (1644). Be sure to contact your Vigilant employment attorney for advice before downsizing. If you aren’t a Vigilant member and would like assistance assessing your risk, contact us today to learn about our unlimited employment law advice services.