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The legal folly of changing employee rating systems in middle of a RIF

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Question: The right timing is an important thing in most contact sports … including layoffs. And suspicious timing is always a red flag to employees and to the courts, as new lawsuit against Boeing shows.

If your organization suddenly changes its employee-scoring rules (to the employee’s detriment) prior to a layoff, it will undoubtedly raise eyebrows that something fishy is going on. The courts call it “pretext” for discrimination … your employees will call it something worse.

Case in Point: Eileen McKee, 52, was a Boeing employee for more than 30 years when the company initiated a RIF. About that same time, the company started to use a new employee rating system to compare employees in comparable positions. The new system placed McKee toe-to-toe against a 36-year-old female employee. McKee received a losing score of 17 to the other woman’s rating of 39. As a result, Boeing cut McKee loose as part of the RIF.

McKee shot off a state age-bias claim and lost. Undeterred, she filed a federal Age Discrimination in Employment Act (ADEA) lawsuit and the court last month sent the case on to trial.

The big reason: the court was especially skeptical of the rapid decline in McKee’s performance rating. Only months before she lost the ratings game in the RIF, McKee had scored a “glowing” performance report. In fact, the category in which McKee scored the highest on her earlier evaluation was removed, which resulted in her receiving a lower score before the RIF. (Cotter v. Boeing Co., E.D. Pa. No. 05-5053, 6/26/07).

What does this new ruling mean to you?

Be aware that it doesn’t take much to get an ADEA case to trial. McKee only needs to show these four elements to get her case before a jury: 1) She’s over 40 years old; 2) She was fired; 3) She was qualified for the job she lost; 4) A “significantly younger” employee was retained.

Here are two key lessons to be learned from this case:

1. Don’t change your evaluation processes during a layoff. It’ll look suspiciously like a strategic plan to get rid of some people. Maybe because of their age? Gender? Race? Don’t worry … employees will show the court and jury the connection.

In this case, the court commented that, “This change in criteria, in the absence of a reasonable explanation, may raise an adverse inference that the change was initiated to adversely handicap McKee’s final score.”

2. Train managers and supervisors on performance management. Giving an employee years of glowing evaluations and then suddenly—before or at the time of layoffs—handing down a poor score is certainly suspicious. Performance management is based on the employee’s performance and not the company’s strategic plan to reduce the workforce.

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