2009: The Year of the Layoff & the Discrimination Charge

OMG I! The national unemployment rate was 8.1 percent in February, up from 7.6 percent in January and from 4.8 percent last year OM

OMG I! The national unemployment rate was 8.1 percent in February, up from 7.6 percent in January and from 4.8 percent last year OMG II! Discrimination charges filed with the Equal Employment Opportunity Commission increased 15 percent in 2008.  In 2008 the EEOC recovered approximately $376 million for victims of discrimination  


     Unfortunately, 2009 looks like it will continue to be the “Year of the Layoff”, which is just another euphemism for “You’re fired!”  As Companies are forced to reduce the workforce, charges of discrimination will continue to increase.  While no Company can stop an Employee from filing a charge alleging their layoff was discriminatory, here are some ways to reduce the odds that an Employee will file a charge and ensure that, if a charge is filed, the Company won’t be found guilty of discrimination:


1.      Be discriminating, not discriminatory when deciding which Employees to lay off.  Practice discrimination = found guilty of discrimination. 

2.      Reduce the workforce only for a legitimate economic justification. Using the economic downturn to get rid of The Others is okay, but immediately hiring their replacements is inviting a charge of discrimination  

3.      Look at the Company’s workforce after the layoff. Analysis the list of Employees to be laid off to determine if a disproportionate number of any protected group (i.e. age, sex, race) affected. If there is a disparate impact, be prepared to defend the decisions that led to the disparate impact.



4.      The Layoff Criteria. When charged with discrimination, the Company must present a “legitimate, nondiscriminatory business reason” for why it selected an Employee to be laid off.  An established Layoff Criteria, comprised of Objective and Subjective Factors, provides the Company with that reason. Some Objective Factors to consider in the Layoff Criteria are:

  •       Performance. Poor performers, based on documented performance appraisals, find it difficult to prove discrimination.
  • Skills. Employees who do not perform essential functions or do not have the knowledge, skills and abilities needed for the Company to remain competitive should be laid off first.
  • Seniority. Seniority (last in, first out) is not the way to determine which Employees to lay off. Using seniority might eliminate high-performing or high-potential Employees. Seniority should be considered only when two Employees have comparable Objective and Subjective Factors.
  • While Objective Factors are the easiest to defend in a discrimination charge, Subjective Factors (i.e. attitude) need to be taken into consideration to ensure the right Employees are laid off. To reduce the risk of discrimination when considering Subjective Factors, at least two Supervisors with knowledge of the Employee’s should be involved in the review process.
  1. Oversight. Before the layoff begins, have an Oversight Committee determine that legitimate, non-discriminatory reasons were used to select Employees for layoff.

  1. Communicate. Employees who feel they have been treated unfairly file charges of discrimination. Prevent this by communicating the justification for the layoff to each Employee. To make the communication more objective and to dispel the perception the lay off is occurring because of a Supervisor’s bias, this should be done by someone other than the Employee’s immediate supervisors.

  1. Document! Document! Document! the layoff process.

 The Bottom Line: Layoffs suck, but they will continue to be a fact of life in the WorkQuake™ of the Knowledge Economy.  Instead of being reactive become proactive by establishing a nondiscriminatory Layoff Criteria that services the best interest of the Company and respects the rights of the Employees. 

Questions: Does management look like a deer in the headlights when faced with layoffs? Can your Company defend the decisions that have been made all the way through the layoff process?



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