Employers often worry about getting hit with age-bias lawsuits when there’s a reorganization and older workers who don’t fit into the new company structure are let go. A recent case highlights some important issues to pay attention to during layoffs to help avoid age-related claims.
Older Worker Loses Job In Reorganization
Jerry Jeney was a sales representative for Quaker Oats Company for six years. When his job was threatened by a reduction in force, Jeney’s supervisor, Ken Willis, kept him on by creating the new job of area retail manager, the only such position in the entire Quaker organization.
A year later, the company again reorganized, eliminating almost all lower-level sales jobs. About 300 employees were terminated, including Jeney, who was then 55 years old.
Employees Ranked For Layoff
To determine who would be retained, the company rated employees in several areas, emphasizing mostly management skills. Jeney received poor scores in management and average marks in other categories. He was considered good at his present job, but not likely to advance.
In connection with the reduction in force, Quaker also had to fill several newly created, higher-level sales positions. But based on Jeney’s ranking, his supervisor didn’t select him for any of these jobs.
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Employee Sues For Age Bias
Jeney sued Quaker for age discrimination. Quaker argued that Jeney was laid off as part of a legitimate reduction in force. And the company said that although Jeney had performed satisfactorily in his prior positions, he wasn’t as qualified as other candidates for the new jobs that required greater analytical ability.
The federal Ninth Circuit Court of Appeals sided with Quaker and threw out the case. The court explained that Jeney failed to prove that Quaker’s stated nondiscriminatory reasons for the layoff were a subterfuge for age bias.
Managing A Layoff To Avoid Age-Discrimination Claims
There were a number of factors that convinced the court that Quaker had acted legally, including the following:
- Job qualification criteria clearly defined. Jeney argued that he had more experience and education than younger employees who were retained. But the court focused on whether Jeney was more qualified to meet the demands of the new jobs. Of the six new positions, five would have required promoting Jeney up four levels, a jump that was unheard of at Quaker. A younger employee chosen for the remaining job as customer manager rated higher than Jeney in analytical skills, which Quaker considered important for the position.
- Same decisionmaker involved. The manager who decided not to retain Jeney was the same supervisor who had saved him from a layoff the previous year. This suggested he wasn’t acting with a discriminatory motive.
- No pattern of discriminatory remarks. Jeney charged that Quaker said it didn’t consider him to be promotable, which he claimed was code for saying he was too old. But the court said promotability was an important consideration in deciding who would be retained because the company expected its remaining managers to advance to the new, higher-level jobs within two years. Thus, the court said the term didn’t indicate age bias.
- Consistent reasons given for layoff. The suspicion of age bias can arise when an employee isn’t given straightforward reasons for being laid off. But Quaker consistently told workers that they were being laid off under a reduction in force in which low-level sales positions were being eliminated.
- Employees evaluated under rating system. Quaker had a clearly defined system for rating employees for layoff that it used in making its employment decisions. Although Jeney attack-ed the layoff ratings process as subjective, the court said subjective evaluation systems are acceptable so long as they’re not a cover for illegal discrimination.