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Maybe it’s just because it’s my job, but I am hearing about a lot of layoffs lately. And because most employment is “at will”—meaning that either the employee or employer can end the employment relationship at any time and for any reason—workplaces that terminate employees without much notice can leave workers feeling like they’ve been thrown overboard without a life jacket. Luckily, most companies have decided to offer severance, meaning they can provide separated employees with support while also getting the assurance that comes with the release of claims typical of a severance agreement.
Layoffs are a mechanism for employers to quickly cut costs. Most employers spend months analyzing and planning to ensure that layoffs are executed as smoothly as possible. However, most impacted employees experience them as abrupt, cruel shocks that come out of nowhere. Job performance is often not addressed in these decisions, potentially leaving high-performing employees particularly hurt or bitter. Rather, factors such as timing of hire, cost of compensation, skills, and department needs are standard review points. Of course, internal relationships can also have a significant impact on employer decision-making.
Even though most employment relationships are “at will,” employers need to be mindful that they cannot simply terminate for any reason. Some reasons, of course, violate the law. Illegal reasons can include everything from discrimination and harassment to termination in retaliation for an employee reporting illegal activity, and so much more. In fact, employment claims are nearly as nuanced as employment relationships can be.
If a Layoff Is Based on Business Needs, Does Discrimination Really Matter?
Most employers have learned to analyze layoff data to reduce disparate impact. In other words, employers do their best to avoid letting go of a disproportionate number of any one protected class of individuals. It would be problematic to see a reduction in force affecting only women, only older workers, or only workers of a particular race or religion unless the employer at issue employs a disproportionate representation of that protected class.
Despite all efforts by employers, some reductions in force may include individuals who are included for discriminatory reasons. Employers should review their own motivations for terminating employees, ensuring bias is not an underlying cause. Further, employers must be careful when seeking manager input into a reduction, as a manager could be motivated by bias, which an employer in turn could unknowingly endorse. When employees are caught off guard by a layoff, without any notice or context, it often causes them to search for some reason and to fill in the blanks. If the story starts to look like one of bias or retaliation, citing a more general layoff as the reason for termination may not be enough to avoid legal trouble.
Whether you are an employer considering how to properly manage a layoff or an employee who feels sucker-punched by a reduction in force, you need to carefully consider the motives of a layoff. As an employer, act with intention in messaging the layoff, ensuring your workers understand the “why” behind it. Preventing misconceptions, and clearing them up early, can save you time, money, and energy down the road—and prevent an employment relationship from unnecessarily turning sour.