Reduction-in-Force: A Disguise for Employment Discrimination

Layoffs can be an inevitable consequence of a slow economy, but they can also be a deliberate consequence of a discriminatory animus. If you find yourself the victim of a reduction in force, consider whether you were the logical choice.

There have been many examples of employers using a reduction in force as a cover for getting rid of employees for illegal reasons. Even when an employer claims to have been following facially neutral layoff procedures, choices they make in deciding which employees to let go may give them away.

Examples of Race Discrimination in the Context of Reduction in Force

For example, in a recent case, Rachells v. Cingular Wireless Emp. Servs., LLC, an African-American employee with a stellar performance record was terminated during a purported reduction in force. Rachells' manager decided to retain four of the nine national retail account executives in the company. In order to justify Rachells' termination, he was given the lowest performance score in the annual review of the nine candidates. Also, he was ranked seventh among the nine candidates based on a reduction in force interview. Ultimately, three Caucasian employees and a Hispanic employee were retained, and Rachells was terminated.

The court considered Rachells' "superior qualifications" and the complaints of a racially discriminatory work environment by other, former employees. In doing so, the court determined that "several red flags were raised concerning the company's purported nondiscriminatory reasons for terminating a top performer."

Another, more obvious, example of an employer using a purported reduction in force as a method for discriminating can be found in the case of Fuller v. Edward B. Stimpson Co., Inc. In that case, the employer created a spreadsheet categorizing employees by race and then used it to make termination decisions in order to even out the racial proportions. The court found this was sufficient evidence to establish that Stimpson used race as a factor in its reduction in force decisions. The employer produced a legitimate, non-discriminatory reason for terminating Plaintiff as part of the reduction in force, Plaintiff's attendance record. However, the creation and use of the spreadsheet, as well as the fact that Stimpson claimed to have considered seniority – yet Plaintiff was among the most senior employees – demonstrated the clear pretext in that case.

What is required to prove a case of discrimination in the reduction in force context?

It is important to remember that, despite these compelling cases, there may be valid business reasons for terminating people or eliminating their positions altogether. So, losing your job during a reduction in force and being a member of a racial minority is not enough to prove discrimination. If a reduction in force is carried out fairly and equally, as to all individuals regardless of race, the termination may not be considered discriminatory.

Courts will look for the following elements when intentional race discrimination involving a reduction in force is alleged:

  • The employee was within the protected group
  • The employee was doing satisfactory work
  • The employee was discharged despite the adequacy of his work
  • There is some evidence that the employer intended to discriminate against the employee in reaching its reduction in force decision. Beaird v. Seagate Tech., Inc., 145 F.3d 1159, 1165 (10th Cir. 1998)

The last element can be established by showing that the employer could have retained the employee, but instead chose to keep someone of a different race.

If you believe you have been the victim of race discrimination, or have any questions about your termination or other employment decisions that have affected you, feel free to give us a call.

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