Tuesday, February 9, 2010

Do you know? Why statistics are so important in reduction in force cases

For the past week, I’ve been examining the use of statistics in workforce reduction discrimination cases (6th Circuit downgrades importance of statistics in reduction-in-force cases and How small is too small? Litigating sample sizes in reduction in force cases). What’s been missing from this analysis, however, is an explanation of why raw numbers are so important in these cases, especially in age discrimination claims.

Many workforce reductions are accompanied by an offer of severance to the group of terminated employees. In fact, I don’t think any employer should pay severance without getting something in return from the employee, namely a release and waiver of liability.

The Older Workers Benefit Protection Act requires all releases and waivers of federal age discrimination claims provided as part of a severance program offered to a group of employees (such as in a reduction in force) to include a written disclosure of the job titles and ages of all eligible individuals selected for the program and all not selected for the the program. The EEOC, in its guidance on Understanding Waivers of Discrimination Claims in Employee Severance Agreements, provides the following example of what this disclosure should look like:

Job Title


# Selected

# Not Selected





















When the lone 63-year-old employee in Job Title 1 is going to decide whether to sign the waiver or pursue an age claim, the only fact he and his lawyer will have to go on is that within his job grouping, 7 out of the 9 oldest employees were RIFed, including the oldest employee. In other words, the raw statistics that the court discussed (and dismissed) in Schoonmaker will likely be the critical piece of information on which your employees will base their decision whether to sue or walk away. And, you have no choice but to turn this information over. Failing to do so will result in the invalidity of the age discrimination waiver.

Schoonmaker may question the relevance of raw statistics, but because the numbers must be disclosed to the terminated employees, they are nevertheless critical to any workforce reduction decision.

Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.