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Reductions in force (RIFs) happen for a reason—usually financial. To keep legal fees and jury awards from mooting savings, be sure to document why a RIF is necessary and who should get pink slips.

Showing a solid business reason for the RIF is just step one. You also must show you selected the right people to lay off—and not for illegal reasons like age discrimination.

Poor performance, function consolidation, shifting priorities and other objective reasons survive scrutiny the best. Analyze the layoff list for signs that affected employees might fall into a suspect classification. Compare employee characteristics before and after the planned terminations. If there’s a pattern, have managers explain how they chose whom to RIF.

Recent case: District manager Paul Schram, 57, worked for Schwan’s Sales for more than 20 years. When economics led the company to consolidate sales districts, it picked him for termination because of “slipping” productivity.

But Schram knew that another district manager was retiring and had told management. After Schram’s termination, he learned the company hired a 35-year-old to replace the retiring manager. Schram sued, alleging he got pink-slipped because he was older, and reasoning he should have filled the vacant position. A jury agreed, and awarded damages. (Schram v. Schwan’s Sales Enterprises, No. C-1-02-241, SD OH, 2007)

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