Selecting to Downsize
When decisions must be made as to which employees will be selected for termination, the main legal requirement in this regard is that the means of selecting individuals for downsizing must not be discriminatory. Determining whether a discharge is actually part of a reduction in force (RIF) is not always straightforward. A work force reduction situation occurs when business considerations cause an employer to eliminate one or more positions within the company.
Determining whether a termination is part of a RIF matters because, if it is, that fact necessitates a modification of the approach typically used in discriminatory discharge cases. Courts accept the general legitimacy of downsizing and the likelihood that many of those who are downsized will be older than age 40 simply because this age group makes up a large proportion of the workforce. A relatively heavy burden is placed on plaintiffs terminated in a RIF to establish a prima facie case of disparate treatment based on age.
The first approach to defining a prima facie case is tailored to the (typical) situation where an employer claims that performance was a factor in selecting employees for downsizing. This approach asks whether any inference of age discrimination can be drawn from a comparison of the ages and relative performance levels of employees terminated with those retained. The second approach is more general and can be used to analyze situations where, for example, some employees are given the option to transfer and others are not.
In downsizing, the question is not why members of the group were discharged or whether they were meeting performance expectations, but whether the employees were selected for inclusion on the list for discharge because of their age.