Related telecommunications companies decided to slash middle. How they did it landed them in court fighting several claims, including age discrimination.
Indiana Bell and Ameritech created complex ranking systems for employees that started with recent evaluations and merit pay data but also factored inand "growth potential."
Indiana Bell's president stated on videotape that the business needed an influx of "new young crazy people." A coordinator of the reduction-in-force (rif) selection process said Ameritech wanted to bring in "some folks that are under 45 years old."
Kim Adams and 53 others affected by the layoffs sued under the Age Discrimination in Employment Act, charging that the company's statements showed age bias and that older workers were unfairly picked for the rif. They also claimed that exit incentive waivers signed by many of them were invalid because they didn't meet the requirements of the Older Workers Benefit Protection Act (OWBPA).
The appeals court found ample evidence, both statistical and otherwise, that the employer may have engaged in age discrimination. This case interrupts a trend of judges rejecting attempts to prove discrimination with statistics.
Considerations such as "growth potential" could be a front for age discrimination, the court said. Company documents described a 62-year-old as "old school" and a 59-year-old as "retired in place."
The court also decided that the waivers fell short of OWBPA requirements. For group, firms have to inform the individuals of the job titles and ages of those eligible or selected for the program. The companies referred only to salary grades.
The court stopped short of saying specific job titles are always necessary, but in this case it said the salary grades didn't provide enough detail. (Adams v. Ameritech Services Inc. and Indiana Bell Telephone Co. Inc., Nos. 98-1506, 98-2259 and 98-2307; Allard v. Indian Bell Telephone Co. Inc., Nos. 98-2426 and 98-2522, 7th Cir., 2000)
Advice: If you are responsible for a large reduction in force, never let it appear that the rif targets minorities, one gender or older workers. Any such pattern means trouble, so crunch the numbers before a disgruntled employee does, and discuss it with your lawyer before you carry out the rif.
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