Supreme Court Tells Employers to Document Legitimate Reasons for Layoff
07-09-2008 - By Rita Risser, Califonia attorney at law

On June 19, the U. S. Supreme Court ruled that a group of employees over the age of 40 could pursue their claims of age discrimination as a result of their layoffs. The court's decision should be followed by all employers contemplating layoffs or terminations of older employees.

The case involved a company that laid off 31 employees - 30 of them over 40 years old. The employer argued it picked them based on "reasonable factors other than age," namely, manager rankings of employees based on "performance," "flexibility," and "critical skills."

The "performance" score was based on the worker's two most recent appraisals. The "flexibility" instruction read: "Rate the employee's flexibility within the Laboratory. Can his or her documented skills be used in other assignments that will add value to current or future Lab work? Is the employee retrainable for other Lab assignments?" The "critical skills" instruction read: "How critical are the employee's skills to continuing work in the Lab? Is the individual's skill a key technical resource for the program? Is the skill readily accessible within the Lab or generally available from the external market?"

Although these factors may sound neutral, obviously they can be applied in stereotypical ways. For example, we often find managers assume that older employees are not retrainable or flexible.

The employees won their jury trial, with each receiving from $60,000 to more than $1 million. The case now goes back to the court of appeals which can uphold the awards.

What this means to you: Make sure all managers are trained to write performance appraisals and rankings that are fair and do not hide age discrimination. All layoff and termination decisions should be reviewed to make sure there is documentation of consistency and legitimate business reasons to support the decisions.

Meacham v. Knolls Atomic Power Laboratory

 

Information here is correct at the time it is posted. Case decisions cited here may be reversed. Please do not rely on this information without consulting an attorney first.