How "neutral" layoff policies can be a form of employment discrimination

A recent study published in Harvard Business Review found that "neutral" layoff policies can disproportionately affect women and people of color.

Sociology professors Alexandra Kalev and Frank Dobbin studied 800 U.S. companies. They found that when organizations needed to layoff workers and did so by cutting positions -- as opposed to by evaluating individual workers -- the result was "an immediate 9%–22% drop in the proportion of white and Hispanic women and black, Hispanic, and Asian men on their management teams." Further, when "companies take a 'last hired, first fired' approach to layoffs, they lose nearly 19% of their share of white women in management and 14% of their share of Asian men."

My employment lawyer alarm bells go off when I read this sort of data. One subset of employment discrimination cases holds employers liable where they maintain "employment practices that are facially neutral in their treatment of different groups, but that in fact fall more harshly on one group than another." School Comm. of Braintree v. Massachusetts Commn. Against Discrimination, 377 Mass. 424 , 429 (1979). Thus, employers really need to be careful when they are implementing layoff policies based on eliminating positions.

For a disparate impact employment discrimination case, an individual would need to be able to prove through the administrative agency processes and/or in court after filing suit, that an employer's allegedly neutral layoff policy fell more harshly on certain groups. Then the employer would have the opportunity to show how the decision was "consistent with business necessity." See, e.g., 42 U.S.C. 2000e-2(k)(1)(A)(i).

These disparate impact cases -- as opposed to the other large subset of discrimination cases called disparate treatment cases -- often turn on statistics: how did the employer's apparently neutral decision have a disparate impact on a certain group? And what other alternatives might have been available?

These cases, like many employment matters, are complicated and turn on the specific facts of the employment relationship(s) and organization(s) in question. Contact me for an employment law consultation if I can help you with yours.