Corporate Layoffs/Restructurings

Layoffs, also known as "Downsizings" and/or "Restructurings," are covered by federal and state law, just as are many other employment decisions by companies. The issue in these cases is normally simple: was the company motivated by an illegal reason when it selected the person(s) for layoff? If this fact can be proven, the layoff decision is illegal. A laid-off employee is not required to prove that the underlying decision to downsize was somehow discriminatory in itself. Proving discrimination is somewhat more complicated in these cases, though, because courts recognize the general right of an employer to reduce its workforce in lean economic times. That said, courts require employers to downsize without discriminating in their choice of persons for layoff. 

Thus, in a case where the vast majority of laid-off employees are older than those retained, age discrimination may be found to exist. Or, where the layoff decision results in a competent, but disabled, employee losing his/her job while "healthy" workers are retained in the same type of job, disability discrimination may be established. These are just a few examples of situations where a lay-off decision may be found illegal. 

An employer cannot terminate a worker for a discriminatory reason during a downsizing, then shortly thereafter replace the employee with a new hire, or internal transfer. Also, it is illegal to deny a laid-off employee the right to transfer into an alternative open position within the company, if that denial is made for a discriminatory reason. Employees being subjected to layoff should generally consider applying for any/all positions within the company that they are qualified to perform, all things being equal. 

Sometimes when employers are down-sizing, they lay people off by offering "golden handshakes", which are special packages to employees who agree to take early retirement. This practice is not itself automatically unlawful discrimination. However, if the offer is being made for the purpose of getting rid of older workers just because of their age, and if it can be shown that there is a real discriminatory motive, the practice is illegal.