The High Court
Raised your Bar
Reductions in Force
Must be Well-Defended
Not just Defended
In Meacham v. Knolls Atomic Power Laboratory a/k/a KAPL, Inc., the this week made an employer's job more complicated when it is time to explain lay-offs and withstand an age discrimination claim.
Knolls is a contractor with the federal government, in the business of maintaining nuclear submarines, and the government directed Knolls to cut its workforce. About 100 employees took buyout offers, but this insufficient to meet the goal imposed by the Navy. Therefore involuntary reductions were required.
To develop an analysis of who went and who stayed, Knolls directed supervisors to score their subordinates using these criteria: performance, flexibility, critical skills (also referenced in the opinion as "criticality"), and years of service. Of the 31 who were laid off, 30 were over 39 years old. The court's opinion reveals that Knolls had an older workforce; 73% of the pool of the potential involuntary terminated (245 employees) were over 39.
Reversing a court of appeals, the Court ruled that the 28 plaintiffs who sued over the lay-offs did not have the burden of proving the selection process was unreasonable. Instead, Justice Souter held that an employer like Knolls, defending an adverse impact age bias claim, carried the burden of showing the process was reasonable.
The lower courts will have to develop the law of reasonable factors other than age under this new decision, but even before Meacham was decided the law was clear: non-age factors must be applied reasonably.
This is however much more significant when a substantial majority of those laid off are over 39. Note that the Court gave little weight to the fact that a significant majority of those not laid off were over 39.
When you are considering a reduction in force, it is imperative that nothing is left to discussion and e mails. A detailed plan must be reduced to writing and additional effort is required when requiring the participation of managers who evaluate subordinates as candidates at risk of lay-off. Their participation must be an informed one, and this entails, in effect, training.