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RIF that shows racial disparity spells trouble

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in Firing,Human Resources

Sometimes, business conditions require companies to implement reductions in force. Before you put your HR seal of approval on who stays and who goes, be sure that hidden discrimination isn’t influencing the decisions.

Look at the composition of your workforce to spot any obvious patterns before and after the proposed RIF. Good RIF decisions are justified by things like performance, seniority or some other legitimate business reason. Document those reasons before you sign off.

Recent case: Todd, who is white and from the United States, worked in New York for a Japanese company. He was fluent in Japanese and got great reviews during the six years before his termination during a RIF. Todd had worked alongside both other white and black Americans, as well as Jap­­a­­nese employees.

When all was said and done, a total of six white Americans and one black American were terminated. No Japanese employees lost their jobs.

Todd sued, alleging that he had been terminated because he is an American.

The court said that his case could go forward, based almost entirely of the makeup of the workforce before and after the RIF. The company will now have to come up with a plausible business-related reason why all the Japanese employees kept their jobs and so many American employees did not. (Brown v. Daikin America, No. 12-2955, 2nd Cir., 2014)

Final note: One of the toughest HR jobs may be advising foreign-owned companies doing business in the United States with American workers. Cor­­por­­ate cultures often clash. What a Japanese company sees as loyalty to Japanese workers may be race discrimination in the United States. That can be hard to swallow. Don’t hesitate to enlist your attorney’s help in explaining U.S. law to management.

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