If you must cut headcount, here’s how to check for ‘disparate impact’

by on July 18, 2011 · 0 Comment POSTED IN: HR Cafe
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Savvy HR folks know that in a reduction in force (RIF), you have to be careful not to select too many members of protected classes for the chopping block. That’s a great way to trigger a discrimination lawsuit.

But are there any hard and fast numbers you can rely on? In other words, exactly what would constitute overselection of minority workers, older workers, disabled workers, et al.?

A guiding hand
A federal appeals court recently provided some valuable guidance on this question. A Missouri employer laid off a 57-year-old employee in a RIF, and he sued. He claimed that the RIF, although framed as performance-based, had a disparate impact on over-40 employees. The employee pointed out that 14 of the 15 people terminated in the RIF were over 40.

But the court retorted that these were the wrong numbers to look at. Instead, the court said, you had to consider the percentage of over-40s in the workforce before and again after the RIF. A big drop in that percentage might indicate disparate-impact bias.

There was no such drop. Before the RIF, the affected division had 49 employees, 40 of whom – 81.4% – were over 40. After, 34 people remained, 26 of whom – 76.5% – were over 40. The court said a percentage change in that range – 4-5% – couldn’t be considered evidence of discrimination.

Cite: Clark v. Matthews Int’l Corp., No. 10-1037, 8th Cir., 12/17/10.

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