Companies may conduct layoffs for a number of reasons. Mergers and acquisitions often create redundancies, making a staff reduction necessary. Layoffs are also common during business bankruptcy and restructuring efforts.
Reducing the workforce at the company can help the business remain solvent and increase overall efficiency. However, terminating multiple workers at once opens the door to claims of discrimination. Workers may file wrongful termination lawsuits alleging that the company considered their protected characteristics, such as their race or medical conditions, when deciding who got laid off and who kept their job.
Business leaders need to be proactive to limit the risk of wrongful termination lawsuits after reductions in the workforce.
Clear criteria can explain decisions
One of the best ways to counter claims of discrimination is to conduct a thorough workforce review before deciding who the company includes in the layoff. Factors ranging from seniority to discipline issues and attendance can serve as verifiable justifications for employment decision-making.
It may also be beneficial to conduct a secondary review before making final announcements. After selecting the workers likely to get laid off, having another professional review the list for trends can identify if the layoff disproportionately affected a specific group of employees or did not impact one particular group.
Companies that maintain documentation regarding the decision-making process and that review decisions before announcing them can potentially minimize the risk of facing employment lawsuits brought by workers who allege that their layoffs were wrongful.
Consulting with business attorneys familiar with employment law can be helpful for companies preparing for reductions in their workforces. Maintenance of appropriate records and the avoidance of clear trends can reduce credible claims of employment discrimination during workforce reductions.