The COVID-19 pandemic has affected the workplace in ways we could not have imagined just a few months ago. Indeed, the economic impact caused by the COVID-19-related shutdowns has prompted many employers to reevaluate how to conduct business and the number of employees they need. Consequently, many employers have been compelled to consider reductions in force. While not limited to times of pandemic, the basic principles apply.
Commonly, employers approach the exercise with a plan in mind: Which business lines are affected? How much payroll do we need to shed? What are the criteria for selection? Which employees will be selected for reduction? Who will make the selections? And more …. In addition, employers should consider the impact of their selections on groups of individuals of a certain demographic.
Considering Title VII of the Civil Rights Act of 1964, for example, employers should ask whether the rate at which females are selected for reduction is greater than the rate at which males are selected? How are minority employees faring against non-minority employees? And, considering the Age Discrimination in Employment Act, what about older employees as compared to younger employees? Additionally, are the differences in rates statistically significant? A disparate impact analysis can help answer these questions and possibly substantially mitigate risk for employers.
What if there is statistically significant disparate impact against a particular demographic? Confirm the criteria used to select the individuals for reduction are “consistent with business necessity” under Title VII. If a criterion does not meet the standard, revisit the selection(s).
Remember, intent need not come into the equation as these analyses examine the impact facially neutral selection criteria may be having on certain demographic groups. Of course, protected characteristics generally should not be included among the criteria being used to select individuals for selection. Be mindful of the importance and applicability of the attorney-client privilege when conducting these analyses and consider retaining a law firm to help.