Times are a bit tough for a lot of businesses, and downsizing is happening in a lot of different industries – but you have to handle the process carefully.
Whether driven by economic conditions, general changes in your market or the fact that your company is just restructuring, reducing your workforce the wrong way can lead to major legal trouble if you engage in disparate impact discrimination.
Disparate impact discrimination occurs when a seemingly “neutral” policy adversely affects people of a protected class, such as those of a specific race, gender or age – even if there was no intentional discrimination.
Before You Downsize, Conduct an Analysis
The old adage “look before you leap” applies many times over here. You don’t want to start downsizing until you conduct a careful analysis to see if you can spot any disparate impacts of your plan. Check to see how your method of choosing where and who to downsize will affect different demographic groups within your workforce. You should end up with roughly the same ratios you have now, such as the same number of women, minority employees and older workers.
Be Careful About Your Selection Criteria
Once you’ve identified any potential risks in your plan, look at your selection methods and make sure that they are as objective and neutral as possible. Make the decision of who to downsize consistent with your business needs and job-related. If job performance is any part of the measurements, make sure that performance evaluations are current, clear, well-documented and free of bias.
While most discrimination cases focus on an employer’s intent, disparate impact discrimination cases focus solely on the outcome of a company’s actions. That makes it critically important to seek legal guidance before you downsize – and to respond quickly to any issues that surface.