Watch out! If you’re contemplating reducing your workforce in order to survive today’s harsh economic climate, you need to prepare for potential litigation.
To do that, make sure you carefully document why you are making the reductions. That’s especially critical if you have been negotiating reasonable accommodations for a disabled employee who may be on your RIF list.
You must be able to prove that you would have terminated the employee regardless of his disability status and that it made sense for you to halt the reasonable accommodations process.
Recent case: Manuel Babayan worked casting gold for a gold jewelry manufacturer until he went out on workers’ compensation.
While he was out, the company was hit by the great recession, and the demand for cast gold jewelry plummeted. The company cut its workforce from 386 employees to just 18. It then outsourced the gold casting jobs, including Babayan’s.
Babayan sued, alleging that the company had refused to reasonably accommodate his claimed disabilities and that he wanted to return to work.
The court sided with the employer. It said that the company had proven it was in dire financial straits and that it would have made no sense to consider reasonable accommodations for Babayan.
The court said, “When a business’s business is basically down the drain, the FEHA [California’s Fair Employment and Housing Act] does not prohibit that business from terminating its employees, including an employee who has a disability.” (Babayan v. Aurafin, et al., No. B211581, Court of Appeal of California, 2nd Appellate District, 2010)
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