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Cutting senior staff to save salary costs? Check impact on older workers

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in Discrimination and Harassment,Human Resources

One way to reduce your labor budget is to terminate staff members who are paid the most and replace them with employees who earn less. But be careful before you implement a layoff based on seniority.

If you have a significantly older workforce, and those older workers are also the most senior, you may end up with an age discrimination lawsuit on your hands.

However, if you run the numbers and see that a layoff based on seniority actually has more of an effect on those under age 40, then go for it.

Recent case:
Jo Ann Allen and Debra Slone, who are over age 40, lost their hospital jobs for allegedly violating their employer’s patient-privacy policy. It seems Allen got Slone to release X-rays belonging to Allen’s granddaughter without written permission.

Allen and Slone sued, claiming they really had been fired due to age, not for violating the privacy policy. They alleged the hospital had instituted a layoff based on seniority, which hit older workers hardest. Since they were older, they claimed to be part of the group hit.

But the hospital was able to show that more employees under age 40 lost their jobs than did those older than 40. Therefore, the court ruled the layoff policy did not disproportionally impact older employees. (Allen, et al., v. Highlands Hospital, No. 07-6414, 6th Cir., 2008)

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