Risks of Recessionary Layoffs

Faced with the prospect that the current recession might not soon end, many employers have to face the difficult task of laying off loyal and hard-working employees. Even when an employer approaches the layoffs with as much dignity and respect as possible, any termination can lead to a claim of wrongful discharge.

As Ellen Simon points out in her excellent Employee Rights Post, (http://www.employeerightspost.com/admin/trackback/115913) using statistical analysis to compare the laid off workers' demographics with the workers who are not laid off could still lead to discrimination lawsuits. Under a statistical analysis, managers would make the initial decisions about who should be cut and who should stay. Before implementing the layoffs, the managers would review EEO statistics to determine whether there are a disproportionate number of protected-class members (i.e., women, minorities, workers over 40, workers with disabilities) on the list of employees marked for termination.

The problem with this statistical analysis is that the employer is still considering employees' membership in the various protected classes when making decisions that affect the terms and conditions of employment. If the employer considers an employee's gender, the terminated employee could still argue that his or her sex played a role in the termination decision. A jury might not care about statistical analysis when a terminated employee of one race made five times the sales of a retained employee of a different race.

Even though using statistical analysis might seem like a neutral manner by which to decide which employees to lay off, it still may expose an employer to discrimination lawsuits. Unfortunately, there is no method for determining who to lay off that will guarantee that no terminated employees will claim discriminatory treatment. The best that an employer can hope to do under these circumstances is seek legal advice regarding reducing the risk of discrimination lawsuits.