As our Nation's economy continues to falter, many businesses are facing the difficult decision to implement reductions in force ("RIFs"). Done properly, RIFs permit employers to effectively streamline their workforce and, thereby, achieve desired economies of scale and increased operational efficiency. Not surprisingly, however, employees who find themselves swept up in a RIF often seek recompense through legal action, particularly the filing of discrimination lawsuits. Even where the employer's motives are devoid of any discriminatory intent or bias, an employer may find itself in a hard fought legal battle if the criteria used for selecting employees for inclusion in the RIF results in protected classes (e.g., minority employees or employees over age 40) being impacted more significantly than non-protected classes.
As a result, employers are well advised to engage their legal counsel prior to implementation of a RIF in order to safeguard against legal liability. When embarking on RIF planning, employers must be careful to identify and document non-discriminatory selection criteria upon which to base their judgments concerning who to include in the RIF. After having done so, the pre- and post-RIF workforce must be statistically analyzed to determine the impact on protected classes. Even where the criteria used is facially neutral, the end result may be that the RIF falls more harshly on one class of employees than another. Such a result does not necessarily counsel in favor of altering the RIF decision, but does warrant a discussion with counsel so as to fully explore legal risks and steps that may be taken to minimize those risks. The bottom line is that time spent in carefully planning and analyzing the potential for legal liability prior to implementation of a RIF will often save the employer significant legal expense if the RIF is ever challenged.
Should you be facing the unfortunate necessity of having to implement a RIF due to the adverse economic climate, we would be happy to assist in planning and implementation so as to minimize the attendant legal risks.