Who won this case? Longer-tenured employees laid off
January 12, 2009 by Sam NarisiPosted in: Age Discrimination, In this week's e-newsletter, Latest News & Views, Terminations
When making cutbacks, some companies opt to lay off workers based on seniority so that higher-paid employees are terminated first. Are they guilty of age discrimination?
Read the facts of this real-life case and decide: Who won?
The facts:
When faced with budget problems, the employer reduced its workforce. To save the most, employees with the most seniority — and therefore, usually, the highest pay — were terminated. Two employees who were let go sued, claiming the policy discriminated against older employees.
The employer said:
Employees weren’t chosen for the layoff because of their age — they were chosen based on how long they had worked for the company. While there may be some overlap, the two factors are separate, and there was no intentional age discrimination.
Who won the case?
Answer: The employer.
Why: The court agreed that a seniority-based policy is not the same as having a policy based on age. As the judge said, “A decision based on years of service is not necessarily ‘age-based.’”
Therefore, the cost-cutting strategy was legitimate and non-discriminatory.
Cite: Allen v. Highlands Hospital Corp.
Tags: age, layoff, reduction-in-force
January 14th, 2009 at 11:53 am
I’ve been in management for over 30 years and I have never seen higher seniorty employee’s layed off before lower seniority employees. Is it just me, or is this a more common occurance than I know about?
January 14th, 2009 at 12:31 pm
This is how an employer rewards years of loyalty and service? Whatever happened to LIFO (last in, first out?)
January 14th, 2009 at 2:02 pm
The reality is that there is very little reward for years of loyalty. Most employers will respond with
“Be glad you’ve got a job” and think that is reward enough.
January 14th, 2009 at 2:04 pm
What a great message to send to your remaining workforce….stick around and eventually you’ll be gone…. I wonder what their turnover rate will be when the economy picks up?
January 14th, 2009 at 4:29 pm
Senority counts only in a Union. Union contracts deal with lay offs by senority, in which the youngest or least senior employees are let go first. It drives labor cost down but not necessarily in the best interest of the company’s performance. In a non-union environment the employer holds all the cards regardless if one is exempt or non-exempt. That’s the name of the game whe none is “at will”.
I deally, an intelligent manager who needs to cut labor cost will take into consideration the EE’s contribution to the bottom line and ones ability to take on new task. When companies make cut backs for cash flow purposes two factors come into play: The work that was required prior to cut backs still needs to get done. Secondly, when employees get over loaded the system becomes inefficent and short cuts are taken to meet the load demand. In either case the organization suffers.
January 15th, 2009 at 2:38 pm
In this situation, these claims could be viewed as a situation of disparate impact regardless of intent and the employer could still be liable in any other court on any other given day. BE CAREFUL!
I would think other than the fact that the whole “give me the best years of your life in exchange for loyalty” idea is a thing of the past in most of the world anymore, just maybe the threat of litigation will help keep companies on track??? If not, any employee suing will be able to pad their early retirement with the money that the company will most likely offer in nuisance value to shut down the claim before it ends up in court. That money may go to better use to send management back for a refresher in business ethics!! Maybe I’m old fashioned….
January 16th, 2009 at 3:18 pm
This is another call for an irrational push back if not revolution prompted by a real injsutice that leads ultimately to collective misery. When employers, institutions violate the social contract, even if it only is implied, and their actions are fully legal, they undercut the authority for their present existence. While there may not be severed heads or blood in the street, lawmakers invariably will propose legislation to counter the injustice, and then you will have a situation like Ledbetter where the legislative remedy probably will further restrict the free operation of business and commerce. A RIF by reverse seniority, how svelte – great going corporate genisues, which they probably are and likley will be enjoying our bail-out bucks.
January 20th, 2009 at 1:25 pm
Even though the employer won, they lost financially. Defending that case probably cost them more thanmany years worth of the difference in salary between the higher paid, long term employees, and the lower paid newer ones. Add in lost knowledge of the past, experience (which usually translates to increased production and accuracy, etc.), and the morale/loyalty issues created, this was an unreasonably expensive layoff. It doesn’t sound like a well thought out plan.
February 18th, 2009 at 12:21 pm
And Compays wonder what has happened to employee loyaltly. I think it has by far outlasted the Company’s loyalty to it’s employees.