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REDUCTION IN FORCE AND AVOIDING LIABILITY TO OLDER WORKERS

REDUCTION IN FORCE AND AVOIDING LIABILITY TO OLDER WORKERS. Susan N. Eisenberg, Esquire Akerman Senterfitt 1 S.E. 3 rd Ave. 28 th Floor Miami, FL 33131 305/374-5600 Susan.Eisenberg@akerman.com. CLIMATE. Aging workforce Unemployment at an all time high RIF attractive tools

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REDUCTION IN FORCE AND AVOIDING LIABILITY TO OLDER WORKERS

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  1. REDUCTION IN FORCE AND AVOIDING LIABILITY TO OLDER WORKERS Susan N. Eisenberg, Esquire Akerman Senterfitt 1 S.E. 3rd Ave. 28th Floor Miami, FL 33131 305/374-5600 Susan.Eisenberg@akerman.com

  2. CLIMATE • Aging workforce • Unemployment at an all time high • RIF attractive tools • Outsourcing of functions • Efficiency of technology • Cost cutting measures • Class Action Lawsuits

  3. THE ADEA • They are members of the protected class • They suffered an adverse employment consequence • They were qualified for the position or another position • Defenses • Good cause • BFOQ • RFOA • After-acquired evidence

  4. The Way We Were… • Prior to March 2005, in order to prove age discrimination under the ADEA, employees had to establish that: • The employer intended to discriminate against them on the basis of their age; or • That the policy or practice complained of was "discriminatory on its face"

  5. Smith v. City of Jackson, Mississippi, 125 S. Ct. 1536 (2005) • Supreme Court ruled that employees can sue over employment decisions that have a "disparate impact" on older workers, even if the discrimination was not intentional.

  6. Smith v. City of Jackson, Mississippi, 125 S. Ct. 1536 (2005) FACTS: • City implemented a pay plan that granted a higher percentage raise to all police officers with less than 5 years of service. • 30 police officers sued under the ADEA claiming that the employer's pay plan discriminated against them on the basis of their age.

  7. Smith v. City of Jackson, Mississippi, 125 S. Ct. 1536 (2005) DISTRICT COURT: • Followed trend applicable in five other circuits (including the Eleventh Circuit) • Granted summary judgment in favor of the employer – holding that "disparate-impact" claims are categorically unavailable under the ADEA. • The Appellate Court Agreed

  8. Smith v. City of Jackson, Mississippi, 125 S. Ct. 1536 (2005) SUPREME COURT: • Held that "Disparate Impact" claims are available under the ADEA. • But – held that the scope of that theory is narrower for age claims under the ADEA than it is under Title VII for other types of discrimination

  9. Smith v. City of Jackson, Mississippi, 125 S. Ct. 1536 (2005) • Even if an employment practice or policy has a disparate impact on older workers… • An employer can prevail if the age based distinctions are based upon "reasonable factors other than age" (a/k/a, a "ROFA")

  10. "Reasonable Factors Other Than Age" • "Unlike the business necessity test, which asks whether there are other ways for the employer to achieve its goals that do not result in a disparate impact on a protected class, the reasonableness inquiry includes no such requirement."

  11. PROBLEMS • Easier to state claim • Statistics only • Point to specific practice • Class actions become norm

  12. BURDENS • Employee • Adverse impact • Specific Practice • Causation (statistics)

  13. BURDENS • Employer • RFOA • Court does not address

  14. BIGGEST PROBLEM • Improper planning • Leads to class actions • Cost of defense and liability reduce cost savings

  15. LEGAL ANALYSIS • Business necessity • Selection process

  16. BUSINESS NECESSITY • Everything is evidence • Put business ducks in a row • Reason is not as important as being able to prove it and consistency

  17. HAVE A CLEARLY ARTICULATED GOAL

  18. PLANNING THE RIF • Establish a Task Force • Educate regarding discrimination and contract considerations • Establish realistic time table

  19. TWO PHASES • Voluntary • Involuntary

  20. VOLUNTARY • Remember jury appeal • Exit/early retirement incentives • Benefits • Problem

  21. MAKE IT LEGAL • Completely voluntary • No retaliation for refusal to participate • Avoid negotiating terms • Avoid misrepresentations • Document • Provide adequate time and information to consider • Get a release

  22. RELEASES - OWBPA • Written in plain English • Specifically refer to ADEA • Additional consideration • Consult with attorney • Time to consider • 21 vs. 45 days • Revocation period

  23. LEGAL INCENTIVE PLANS • A flat dollar amount • A fixed amount, e.g., dollar amount multiplied by the number of years of service or by the years until normal retirement date • A percentage of salary to all employees above a certain age • Flat dollar increases in pension benefits, e.g., $100.00 a month or percentage increases (example: 15%)

  24. INVOLUNTARY LAYOFF • Written Termination Policy • Articulate business reasons for the RIF. • Identify existing or define new selection criteria • Designate employee notification responsibilities • Determine termination pay and benefits • Decide on recall provisions. • consider review/appeal mechanism to centralize the process • Provide support services, especially counseling and out placement

  25. INVOLUNTARY LAYOFF • Meet with decision makers to explain process and criteria • Recommendation comes from first line managers who may not understand the legal ramifications

  26. SELECTION CRITERIA • Objectivity is key • Different departments may have different criteria • Document Document Document

  27. POSSIBLE SELECTION CRITERIA • Performance • Employee comparisons • Seniority • Highest paid

  28. ADVERSE IMPACT STUDY • Organizational structure • Discrimination claims • ULP claims • Public policy claims • Breach of contract • Cross examine decision makers

  29. CONSIDER WAIVERS

  30. IMPLEMENTING THE RIF • Institute hiring freeze • Announce RIF • Document selection process • Conclude terminations in short time • Anticipate post termination inquiries • Give neutral references

  31. CONSIDER WHAT JURY WILL ASK • Was the employer fair • Were the lay off criteria reasonable • Was the employer consistent in its decision • Was the employer candid with the employee • Was the employer sympathetic • Did employer try everything short of layoff

  32. COMPLY WITH STATE LAWS

  33. WARN CONSIDERATIONS • 100 Employees • 33% and at least 50 affected employees • 30-day period • 90-day look back • 60-day notice

  34. REDUCTION IN FORCE AND AVOIDING LIABILITY TO OLDER WORKERS Susan N. Eisenberg, Esquire Akerman Senterfitt

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