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The importance of performing a disparate impact analysis in Reductions in Force

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A federal jury on Tuesday awarded more than $6.2 million in an age discrimination suit brought by two scientists who said they were fired from their jobs at a Pennsylvania chemical manufacturing company when the company targeted only older workers in layoffs in 2005.  The case highlights the importance of statistically analyzing the effects of a proposed RIF for any disparate impact on protected workers (like older workers or minorities) prior to implementation.

The defendant had argued that all of the layoffs were justified because funding for the plaintiffs’ positions was eliminated.  But the plaintiffs’ attorneys  countered that the company was manipulating its budget figures to justify layoffs in which every terminated worker was 55 or older. A proper analysis of the same evidence, they said, showed that some of the younger workers should also have been considered for layoffs.

If it is true, as the article suggests, that the RIF affected only employees older than 55, then the company blew it by not doing a more rigorous disparate impact analysis.   I cannot imagine allowing a client to RIF only older employees.

Perhaps more telling, and clearly one reason for the verdict: a company manager testified at her deposition that she had been told that the company wanted “young blood” to replace one of her subordinates, and that she understood the remark as a suggestion to violate age discrimination laws.  (Another remark about “old farts” was excluded by the judge as hearsay.)  It seems that nearly every successful age discrimination case has at least one of these damning remarks as part of the story.

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