The Hidden Minefield of Workforce Reductons
There's sadly lots of news about workforce reductions. There also seems to be lot
s discussion about discrimination cases in the context of workforce reductions but as far as I am concerned, most of them are really missing the point.
I have handled many discrimination cases over the years in times of recession. On most occasions, companies have downsized with the advice of many lawyers and consultants. Those companies appear to have been given the same or similar advice as that which was given by an employment lawyer recently published in a National Law Journal article.
It goes like this:
Successfully battling this "recessionary discrimination" requires the use of statistical analysis comparing the demographics of those laid off with those who are retained.
This is the way that advice is translated:
- Managers are given directives to downsize and cut costs in their departments by a certain percentage or certain number.
- Managers, armed with instructions on methodology, make the decisions about who should stay and who should go.
- Following the standard advice, overall statistics are then looked at to determine if there are a disproportionate number of women, minorities, or those over 40, who are on the targeted list.
If the statistics look good, the terminations are executed, and the company thinks it's off the hook as far as it's exposure to discrimination lawsuits.
The problem is that while companies relying on this advice may be off the hook for large class action cases, they are not off the hook on the individual employment discrimination case.
For example, as often happens, the long term employee with a solid record of performance is selected while their much younger counterpart is not. There is no objective support for the decision and the company gets sued for age discrimination.
In that circumstance the overall statistical data makes no difference whatsoever – not to me, not to my client, and not to the jury. What matters is: what justification did you have for terminating the 57 year old employee and keeping the 32 year old my client trained to do his job? If the explanation is not credible, more often than not, the company will lose.
It is an inescapable truth that when managers are given discretion to terminate employees, some bias may come into play – whether it’s getting rid of a woman, a minority, or an older employee for whom the manager has some prejudice. A workforce reduction gives that manager a chance to get rid of the disliked employee. This individual biased decision may not show up statistically, and statistical analysis is not going to get the company off the hook in those cases.
So companies beware. While it's certainly not bad advice, or the wrong advice to look at the overall statistics on a workforce reduction, it's not all that matters.
